The Good, the Bad, and the Ugly: Proposed Changes in Reporting Gaming Winnings

– By Joshua Peukert

The Internal Revenue Service (IRS) recently published Notice 2015-21, “Safe Harbor for Determining a Wagering Gain or Loss from Slot Machine Play,” asking for comments based on issues such as the following:
1) The definition of the term “slot machine.”
2) The definition of a “session of play.”
3) Whether payouts of merchandise and bonus rewards should be included as winnings.
4) Whether this method should be expanded to other forms of gambling other than electronically tracked slot play.
5) What the problems of administration might be for casinos.
In concurrence with Notice 2015-21, the IRS published
“Information Returns; Winnings from Bingo, Keno, and Slot Machines,” which proposes regulations updating tax reporting rules and provides notice of a public hearing regarding the proposed regulations to be held on June 17, 2015. In addition, the IRS requested comments from casinos specifically related to a potential reduction in the reporting threshold of taxable winnings from bingo, keno, and slot machines in an attempt to standardize reporting thresholds.

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