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IRS to Reduce The Threshold on Winnings Reporting

By: Marica K, March 10, 2015
For every $600 players will have to fill in a tax form

For every $600 won players will have to fill in a tax form

The IRS have made a proposal to lower the threshold for winnings on slots, bingo and keno that are supposed to be report for taxation. Current threshold of $1200 is suggested to be reduced to half the amount, that is to say, $600. American Gaming Association, together with the land casino companies on US territory openly oppose to this proposal.

Reducing the Winnings

The current regulations oblige the casinos to fill out tax information forms on winnings of $1200 or higher for slots games and bingo, whereas for keno the triggering amount is $1,500. This limitations were set back in 1977 and haven been changed since. According to Las Vegas Review Journal The IRS intention is to adjust the regulations to the inflation rate, since the $1,200 in 1977 are worth $4,627 today. This is one of the reasons why The IRS have suggested to reduce the reporting amount to $600. The Internal Revenue Service has given a period of three months to casino industry to respond to suggested changes in regulations. They have invited the representatives of gaming industry to give their comments and opinions about the possibility to reduce the reporting figure as well as to discuss the threshold of electronically tracked slot machines.

Gaming Industry Worried

The gaming industry considers this change unnecessary and harmful for the industry. When a player hits the triggering amount, the machine locks and the winner is supposed to fill in the required tax forms and the machine is reset. Should the reporting amount be reduced by half, it will cause more frequent breaks in the play and resets of the machine, not to mention the additional paperwork and administrative hassle. Consequently, since the machines will be unavailable for play until the procedure is completed, the revenues would suffer as well. In response to this the tax officials state that majority of players already keep electronic records of their play so the administration would not be such a big problem in this transition. American Gaming Association senior vice president, Sara Rayme expressed their concern: “This potential policy change could create additional burdensome and unnecessary reporting requirements for our industry.” Still, the matter is not final, since there is no guarantee that the proposal will be realized. For the time being, this is an invitation for discussion of the suggestion.

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