The claim: The IRS would collect $846 million from the winner of a $1.28 billion lottery

A Jan. 7 Instagram post (direct link, archived link) shows a screenshot of a Forbes article with the headline, “Winner Of $1.28 Billion Lottery Gets $433.7 Million After Tax.”

“Congratulations to the IRS on winning the $846.3 million Mega Millions Jackpot,” reads text above the screenshot.

The post generated over 7,000 likes in less than a week. Similar posts have amassed hundreds of interactions on Instagram.

Our rating: False

This claim botches the math by confusing the lump sum and long-term payouts. A winner of that jackpot who took the long-term payout would pay a maximum of about $473 million in taxes, experts say. Taxes on the lump sum would be about $276 million.

Winner would not give $846 million in taxes to IRS

The Forbes article ran in July 2022 after an anonymous partnership purchased the winning ticket in Des Plains, Illinois, for the second-largest Mega Millions payout in the company’s history. Reuters reported the jackpot was estimated at $1.28 billion, but it swelled to $1.34 billion as people piled in their money.

In no scenario would a winner of a $1.28 billion jackpot pay $846 million in taxes to the IRS, according to Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, which analyzes tax issues.

Nowhere in the original Forbes article does it say that the IRS would collect a total of $846 million. ​​​​​Instead, it explains how federal and state taxes would apply to a $1.28 billion lottery winner and estimates what the winners might end up with depending on their tax bracket.

USA TODAY has previously reported that the winner of a Mega Million jackpot can choose to take the full amount in annual payments over 29 years or a smaller lump sum immediately in cash. The lump sum is the amount of cash available at the time of the drawing to pay a prize, according to Danielle Frizzi-Babb, a spokesperson for the Mega Millions contest.

In the scenario in the Forbes article, the lump sump payout for the $1.28 billion prize in July 2022 would be $747.2 million.

Fact check: False claims about IRS enforcement, taxes on Americans

The IRS enforces a 24% federal withholding tax when a person first wins the lottery. The rest of what a winner owes in taxes depends on their tax bracket, according to Gleckman. The top tax bracket is 37%, which applies to annual income in excess of $578,125 for single filers and $693,750 for couples filing jointly.

Assuming the winner qualified for that bracket, they would pay the IRS a total of around $473 million in taxes if they chose the $1.28 billion option, and a total of $276 million in taxes if they chose the $747.2 million option, according to William McBride, vice president of federal tax policy at the Tax Foundation, an independent tax policy nonprofit.

But these are just approximations, experts note. The $474 million figure for the annuity plan is imprecise since it would be impacted by how much a person already had in taxable income and other deductions, Steve Ellis, president of Taxpayers for Common Sense, a nonpartisan federal budget watchdog organization, told USA TODAY in an email.

Tax brackets can also change over the next 29 years which can also impact the figure, according to Robert Pagliarini, president of Pacifica Wealth Advisors, an investment management and tax strategy firm.

In any case, none of these scenarios would have the winner paying the IRS anywhere near $846 million in taxes.

USA TODAY reached out to the social media user who shared the claim for comment.

The Associated Press also debunked this claim.