We held a raffle in May and needed to give a 1099 to the person who won. The value of the prize was declared to be $710.00. I received a copy of the 1099 Misc form from the IRS, also included was a Form W-2G. I'm not sure what to do with this.
Raffles are gaining in popularity for nonprofit fundraising. Many organizations give the winner a 1099 and hope for the best. Unfortunately that’s not the right way to run a raffle. The IRS has increased scrutiny of gaming activities, and has partnered with many states to compare state gaming registrations to proper IRS reporting. If the prize is more than $600, and more than 300 times the ticket price, the organization must report the winnings to the IRS using a W-2 G. For more information, you can read IRS publication number 3079, Tax Exempt Organizations and Gaming, available on irs.gov.