There is a box for withholding tax on the 1099-MISC, but backup withholding is not required in cases like this. Someone correct me if I’m wrong. I’m only familiar with 1099-INT and 1099-MISC for non-employee compensation (when withholding is generally not done.)
Ahh…The Hatchalor
Going off the top off my head this guy was a real piece of work who knew just enough to be dangerous to himself. Not paying tax on the Mil was just the start. He funneled money for speaking engagements through charities which were only set up to pay him an income. When an accountant told him the best way to come clean he fired the accountant and found a new one that would report things the way he instructed. He lied time and time again in court about finances which were widely known. Most of his sentence is for the lies.
I think the percentage of time served is a lot higher on a Federal sentence.
Admittedly a little dated, but still relevant.
California takes their 6% of winnings, if they are won in Califfornia. But otherwise the winner has to keep some money set aside for Uncle Sam.