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IRS Proposes Lower Reporting Threshold

IRS Proposes Lower Reporting Threshold

The Internal Revenue Service has proposed lowering the threshold that requires individual gamblers and casinos to report a jackpot from ,200 to 0. The limit was established in 1977 and created a cottage industry of ,199 jackpots over the years. The new proposed regulations could be bad news for the casino industry.

“This potential policy change could create additional burdensome and unnecessary reporting requirements for our industry,” Sara Rayme, senior vice president of public affairs for the American Gaming Association, said in an email last month.

Rayme said the changes are not guaranteed, and the AGA will participate during a 90-day comment period.

“Rather than going backwards, the gaming industry seeks forward-looking policies that enable our industry to reinvest, innovate and create more jobs,” she said.

The measure would affect all casinos in the U.S., commercial and tribal alike. The IRS is taking comments on whether it should normalize all kinds of jackpot games like keno, bingo and VLTs.

The IRS is also taking public comments on a proposed procedure that would provide a “safe harbor” that would allow taxpayers to use a different method for determining profit or loss from slot machine play.

The proposal uses a different interpretation of what the statutes mean by “transactions,” and would make it less onerous for a player to determine profit and loss from a slot machine.

The problem of determining such profits is complicated by advances in gaming technology, which obviate the need for cashing out tickets on many machines.

If the procedure were approved, it would provide a “safe harbor” method, but not relieve taxpayers of the need to keep records.

The new procedure would not permit losses and gains from separate sessions to be used against each other. It would also not apply to non-wagering expenses that are related to gambling.

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