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Court says state allowed to withhold lottery winnings

MADISON, Wis. (AP) — An appeals court says the state legally withheld a portion of a man’s $9.7 million Megabucks prize to cover his back taxes.

Donald Bottolfson won the money in 1994. He set up a trust to receive annual prize payments. He then sold the prize money from the trust to Great-West Life and Annuity Insurance Co. The Department of Revenue would pay into the trust and the trust would pay Great-West.

In 2001, however, the Department of Revenue withheld about $429,000 of the winnings to satisfy back taxes Bottolfson owed. Great-West filed a claim in 2005 seeking a refund of that money, which was denied.

The 4th District Court of Appeals ruled Thursday that the state was allowed to withhold the money. Great-West’s attorney didn’t immediately return a message.

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