This answer comes from Jean Scott, fresh off her update of Tax Help for Gamblers, co-written by Marisa Chien and currently available as an e-book for Amazon Kindle, Barnes & Noble Nook, and Apple devices.
Well, you aren’t the first person to call the IRS "crazy." But we must remember the government is always looking for ways to make sure people pay required taxes. The IRS has always been suspicious that many gamblers just do not report their wins as they should – thus this news from the IRS that’s getting gamblers all worked out!
First, this new $600 thing is just a proposal The IRS is inviting comments on the issue and will hold a public hearing on June 17. Some are suggesting a mass write-in effort by gamblers to protest, but I don’t think there would be enough participation to be influential. More successful will likely be the casinos’ efforts. They hate this idea as much as the players do and their lobbyists are already busy in Washington citing the problems of increased paperwork, irritated customers, and added costs, to name just a few. So I’m going to sit back and quit worrying about what might happen in the future. There’s time enough to deal with any negative tax changes if/when they do happen.
Actually, there is one positive note in how the new IRS proposals might affect gamblers. It looks like they’re considering some changes that would make clear that gamblers can use the "session" method of reporting their wins and losses. There have been some court cases that supported this method over the past few years, but it has often been difficult for gamblers to fight an IRS that often used the older "jackpot" method, looking only at W-2G figures. I discuss this problem at length in the new edition of Tax Help for Gamblers. It’s always a lot of work to update this tax book, but I would be happy to do it again if the IRS finally eliminates this big problem.
