If I am playing a game where I could win a prize or Money if I don't accepted it and it is still on the game do I still pay taxes on it?

[Carl]

Basically, what you're talking about here is what the IRS would consider a form of gambling, unless this was something akin to a raffle for a charity or something of that nature.

I've looked for the IRS publication on this, and I can't find it. I recall reading about this in some obscure IRS pub years ago, and for all I know the rules/laws could have changed since then. But in order to provide you "something" to work with, I'll assume there's been no change.

Basically, if you "played the game", then as far as the IRS is concerned you played with the "intent" to win. So weather you accept the prize or not doesn't matter. This basically comes into play only if you are sent a tax reporting document for the prize. So if you received a 1099-MISC or some other tax reporting document, it's reportable on your tax return weather you actually accepted the prize or not.  There are caveats to this though. For example, if you declined the prize and they awarded it to the 2nd place winner.

[mellish7777 · Accepted solution]

I disagree....you can refuse a prize and not include its value in your income.

Prizes and awards.If you win a prize in a lucky number drawing, television or radio quiz program, beauty contest, or other event, you must include it in your income. For example, if you win a $50 prize in a photography contest, you must report this income on Schedule 1 (Form 1040 or 1040-SR), line 8. If you refuse to accept a prize, don't include its value in your income. 

Pub 525 page 33 

[rjs]

I'm not sure what you mean when you say the money "is still on the game." If the money is accessible to you, and you could easily take it at any time, then you have what is called "constructive receipt" of the money. The money is yours and you have to report it as income and pay tax on it, even though you haven't actually taken it. It's the same as if you had the money in a bank account and could withdraw it at any time. It's your money, even though you haven't taken it out of the bank.

To decline or refuse the prize, you would have to take some action to have it removed from the game, so that it is no longer available to you.