While the casino world focuses on fighting an IRS idea to track slot jackpots starting at $600, a little-noticed companion proposal would benefit gamblers, a tax expert says.
The proposed change in Internal Revenue Service procedure would establish a “playing session” concept, which could allow players to report less gambling income on their tax return than what is listed on a W2-G the casino issues to jackpot winners and the IRS.
“The IRS is actually doing something that’s taxpayer-friendly with the session method,” says Marissa Chien, co-author of “Tax Help for Gamblers” (Huntington Press) and president of Advantage Tax Plus accounting firm in Nevada.
“That’s what is getting lost in all this $600 nonsense.”
Chien is an Enrolled Agent, one of about 11,000 federally licensed tax specialists who is allowed to represent taxpayers before the IRS. Her 300 individual and corporate tax clients include professional gamblers whose W2-Gs total hundreds of thousands of dollars each year. She also plays poker and video poker.
Since March, the IRS has been criticized by casinos and gamblers outraged that the agency said it is considering reducing the threshold for reporting slot jackpots to the government. Under a rule in effect since 1977, a casino must issue a W2-G for a slot jackpot of $1,200 or more; the IRS said it might reduce the limit to $600.
That proposal drew more than 14,000 comments on the IRS website, and more than 10,000 people signed an American Gaming Association petition protesting the idea. The $600 suggestion is mentioned in a proposed regulation to “update and simplify” rules for businesses paying slot, keno and bingo winnings.