Marissa and I discuss this subject in the tax book chapter titled "Federal Government Issues," in the section called "Big Brother is Watching You." Casinos don’t just issue W-2Gs and 1099s, as they're now required to do other types of reporting to the federal government to fulfill new anti-money-laundering rules. And it's not just for that now-famous $10,000 limit for cash transactions. Casinos also have special requirements that trigger reports at lower limits. We talk about the particular forms the casinos might fill out – with or without your knowledge:
This is a huge tracking problem for a large casino, where customers may be playing many different games, buying and cashing in chips all over the place, and/or taking markers and cashing out for multiple smaller amounts. Therefore, a casino is required to record many single transactions below $10,000. According to Title 31 rules, when recording a transaction of $3,000 to $10,000, the casino employee must verify and record customer information, including ID; record transaction information, including the amount, date, and serial numbers if exchanging cash for travelers checks; and retain the record for five years from the date of the transaction.
This is as detailed as we can get when answering questions that some may put to us. Marissa says that if we start answering specific individual questions in this area, it could potentially be construed as assisting in money laundering and/or skirting the cash-reporting rules. Although we try to be as helpful as we can, tax issues surrounding gambling can be extremely complicated and ultimately depend on the "facts and circumstances" of each individual taxpayer. We suggest you consult a tax professional whenever you have complicated issues.
Tax Help for Gamblers, now in its second edition, is available in paperback from ShopLVA.com, or as an eBook for Amazon Kindle, Barnes & Noble Nook, and Apple devices.
