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IRS Accepting Comments Regarding Lowering W-2 Threshold to $600

Discussion in 'Casino Industry & Development' started by ronc, May 17, 2015.

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  1. ronc

    ronc High-Roller

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    Please note--I know this could turn political and I am not trying to engage in conduct that is not accepted here, but I do think it is important that all gamblers (especially slot/VP players) have the chance to be heard on a controversial issue. If the thread is allowed to stay, please stay away from politics. Also, please move to another part of the forum if that is more appropriate for this item.

    There has been a lot of talk about the proposed change in the threshold for "earning" a W-2. The IRS is now accepting comments on this issue:

    http://www.regulations.gov/#!documentDetail;D=IRS-2015-0006-0001

    Commenting is open until June 2.

    This is a description of what the regulations cover from the document:

    "The proposed regulations would update and simplify the existing information reporting requirements under ยง 7.6041-1 of the Temporary Income Tax Regulations under the Tax Reform Act of 1976 for persons who make reportable payments of bingo, keno, or slot machine winnings."

    (Does a government agency saying they are going to "simplify" sound scary?)

    Here are some bullet points from the a group against the proposal that I found on another forum. The group is the AGA; I assume the represent the gambling industry in some way:

    --The IRS could soon force casino guests to dramatically increase the level of paperwork, which would severely undermine the customer experience.
    --Specifically, the IRS may consider lowering the tax reporting threshold on slot machines from $1,200 to $600.
    --Not only has this $1,200 threshold existed since 1977, but when accounting for inflation indexing the threshold should actually be nearly $4,700 today.
    --This potentially burdensome requirement, for taxpayers and for the IRS, would cost states and cities significant tax revenues that pay for vital public services, such as teachers, firefighters and road improvements.
    --Please tell the IRS not to reduce the slot gaming winnings threshold from $1,200 to $600 because it would severely harm the customer experience and reduce state revenues.
     
  2. Krh2o

    Krh2o MIA

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    i know this isn't the practice now, but what if.......

    You have your players card in and get a jackpot that normally triggers a hand pay. Instead it just lights up and you can keep spinning. A slot attendant will walk over and you verify ID that it is you playing. The attendant will then type in a code in the machine verifying it. Until the code is entered, you cannot cash out. No IRS forms. Since they can tell your coin in and coin out the casino will know how much you made each day. If at the end of the year you make over $600 then you get a 1099. Seems with all the info they have now on the exact amount people are gambling this is an out dated idea.

    If you don't have a players card then you get the IRS forms as normal.
     
    Last edited: May 17, 2015
  3. 34cents

    34cents Low-Roller

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    And what about those who don't use a players card for this very reason?
     
  4. Krh2o

    Krh2o MIA

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    You would get the IRS form as it is now.
     
  5. 34cents

    34cents Low-Roller

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    So what if I hit a few wins like $400-$500 throughout a couple days which overall total over the $1200 limit but I wasn't playing with a players card?

    Not trying to avoid paying if I have to but why pay if I don't need to?
     
  6. chitownjohn

    chitownjohn High-Roller

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    The way I understand the proposed change is that earnings will be taxable if net winnings exceed $1200 per day at a single establishment. Also single jackpot wins over $1200 are immediately taxable.

    I'm not sure how these are enforceable unless they require everyone to use a players card.
     
  7. Chuck2009x

    Chuck2009x VIP Whale

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    Let the industry do the lobbying. The IRS knows damn well why individual gamblers don't want it changed.
     
  8. ronc

    ronc High-Roller

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    That is fine, but most of us don't win overall and more W-2's will mean that we will have to do more record-keeping to prove losses to offset the wins. The IRS seems to want to accept the casino's word on wins but not on losses at this point, since you can't use a win/loss letter to show losses. If all this goes into effect, all information from the casinos should be accepted by the IRS.
     
    Last edited by a moderator: May 18, 2015
  9. bardolator

    bardolator Lifelong Low Roller

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    I favor the IRS collecting more of what it is owed with less paperwork. This looks like the exact opposite- more paperwork which may result in less being collected as players rush to cover their asses by keeping better records of their losses.
     
  10. bigalbr

    bigalbr VIP Whale

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    The IRS needs to take a more realistic view of gambling. In general, no slot players are winning. There is no "income". The IRS gets their cut through the corporate income tax. That's enough imo. Quit hassling granny for money on the back end.
     
  11. leo21

    leo21 VIP Whale

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    It didn't strike me that all the proposed changes would have to be packaged together. So they could presumably lower the threshhold without changing it to net winnings. It would be easier on a gambler to be tracked through the club but I can't see why they also couldn't continue to allow journaling as they do now.
     
  12. Grid

    Grid VIP Whale

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    On a side note I often use a little trick when playing to keep my "wins" from taking away from a better back end host comp. I usually play $1.00 & $5.00 mec slots. Game like Top Dollar, Phoenix Gold, Pinball etc all have bonus games that can pay out fairly well. I get the bonus symbol and i yank my card out before I hit the "play" button. That win doesnt seem to be recorded. When the Trop was doing their cash back on loss promo i did this on Top Dollar there and it DID NOT show up. So it does seem to work.

    If the IRS relies on the players club for info it seems pretty easy to beat that using your card the right way.
     
  13. ronc

    ronc High-Roller

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    Somewhere in all of this will be a move to make machines lock up when there is no card inserted. Either your card is in it, or there is no play.

    I look for them to also try to tax all wins in casinos in the future; not just slot-type wins. If everything is tracked, they have the means to do it. All they have to do is write rules on casinos recording every cash buy-in and they will be off and running. A way to raise revenue by taxing winnings that exceed losses...
     
  14. vwhiten

    vwhiten High-Roller

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    How do table games work?? Certainly the dealers and pit bosses don't keep track. Does the IRS expect those that win big at the blackjack table to be on the honesty system?? Just wonder because I don't play anything but VP and slots -- yet. Val
     
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  15. NickyDim

    NickyDim VIP Whale

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    A W-2g is only generated at table games if any one bet paid is 300-1 odds or more. (IE: blind bet on ultimate Texas holdem pays 500-1 on a Royal Flush.) And then only that bet is reported, any other side bets that don't meet the 300-1 odds even if paid on the same game do not get reported. So a $5 royal on UTH will get you a $2500 W-2G, but a 10,000 double down in BJ that pays $20,000 does not.
     
  16. ronc

    ronc High-Roller

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    That is correct...now. Once we are all trained on using a card for all play, I believe they will try to get on this side of the casino, too. Think about it--they know someone loses $20K and can't claim a loss; they will want to figure out a way to tax the person who has a gain of $20K and can't support it with a loss. The wins are already "taxable", so it will be a move to collect those taxes, not impose a new one.
     
  17. ronc

    ronc High-Roller

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    Yes, they do expect honesty. Those wins are taxable income, they just don't generate a W-2. They should be on the person's tax return. Losses can be used to offset them, but they have to be recorded and claimed on the return.
     
  18. chitownjohn

    chitownjohn High-Roller

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    I was going by the wording in the regulation that mentions 2 specific criteria. It appears that they want to track session winnings in addition to the jackpot wins that exceed the threshold. I think they want to do both (i) and (ii) but the threshold seems to be up for debate. It may be changed to $600 for each of these, but they might only do the $600 threshold for (i) and not (ii) or visa versa. That's my understanding.

    Under these new rules, gambling winnings for electronically tracked slot machine play must be reported when two criteria are met:
    (i) ]The total amount of winnings earned from electronically tracked slot machine play during a single session netted against the total amount of wagers placed on electronically tracked slot machines during the same session is $1,200 or more;

    (ii)at least one single win during the session (without regard to the amount wagered) equals or exceeds $1,200.

    The first criterion helps to implement the safe harbor for computing gross income attributable to electronically tracked slot machine play described in Notice 2015-21. The second criterion is intended to be consistent with the casino industry's current practice of gathering payee information when a player wins a single jackpot that satisfies the reporting threshold
     
  19. zignerlv

    zignerlv Low-Roller

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    That is the key point which they SHOULD understand, but you wonder if they understand the casino business at all. They are chasing revenue that as a whole is NEGATIVE, due to the house advantage on these games. Certainly there are hundreds of better places to look for more tax revenue.
     
  20. ronc

    ronc High-Roller

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    They tax the casinos under existing codes for their wins, then they want to sort out the winners from the losers among the gamblers and tax those winners, too. Of course, you can also be a "loser" without sufficient proof of losses and end up paying taxes on a win, too!
     
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