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IRS Backs Off Gambling Tax Changes
U.S. TAXMAN RELENTS ON EXPENSIVE GAMBLING TAX PROPOSALS
American Gaming Association says IRS row-back is "a big win" for everyone.
Changes to tax laws on casino winnings proposed by the IRS in the United States would have been complicated and expensive to implement, and have been withdrawn, reports the Las Vegas Sun newspaper.
The proposals included new rules about how slot winnings should be reported, suggesting that the reporting ceiling be reduced from $1,200 to $600, and that casino operators use information captured by player loyalty card programs to report slot wins and losses to the IRS.
The industry countered by claiming that the changes would be very difficult and costly for casinos to apply, explaining:
* That loyalty card programs were not designed for that purpose and altering them would be costly for gaming companies;
* Players would resent this information being provided to the IRS and would probably be discouraged from signing up to loyalty programs;
* There could be administration difficulties; players often lose cards and sign up for new ones...and they frequently share cards with family and friends, making accurate reportage difficult;
* Regarding the reporting ceiling, operators pointed out that each time a player hits a $1,200 or larger jackpot, the slot machine has to be shut down while the casinos complete the IRS tax reporting procedure.
Because of this, the AGA estimated that lowering the threshold to $600 would cost a casino $300,000-$600,000 each year, depending on the size of the business.
The IRS accepted the arguments and both the loyalty card and the lowered reporting threshold proposals were dropped from the new rules.
Geoff Freeman, chief executive of the American Gaming Association said Friday:
“Today’s final IRS regulation is a big win not only for gaming companies and millions of casino visitors, but also for state and local governments who would have received fewer gaming tax dollars”.
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