Jean Scott writes:
About a year or so ago, the IRS proposed some new regulations about how they wanted to treat casino-machine gambling wins. Instead of using logic – not a strong IRS suit of course – and raising the amount that would trigger a W-2G from the old '70s amount of $1200 to something higher that would take into account current financial considerations (applying inflation indexing, the threshold should actually be nearly $4,700 today), they proposed to lower that figure to $600.
Why would they do that? Well, the IRS has a sneaking suspicion that most – really an overwhelming number – of gamblers do not put their gambling winning figures on their tax returns unless they get some paperwork. And this is not an inaccurate view. Most of them do not do this because, although they win some days, they are net losers at the end of the year. They do not understand that IRS regulations do not allow yearly "netting out" but require "session" totals, listed winning and losing "sessions" separately on a tax return. (This is not a clearly-defined concept, since the word "session" doesn’t appear in any IRS regulation, much less is it explained, although some current court cases have started to shed some light on this issue. I spend many pages in the current [third] edition of Tax Help for Gamblers discussing this subject!)
But, returning to the question, when these proposed new IRS regulations came out, the gambling world was in an uproar. The Internet was awash with complaints. Some gamblers said they would just stop playing, period. Others urged a grass-roots write-in campaign – and although I think this often is a waste of energy, I did sign one petition. However, there was a much more powerful force that objected strongly to these new regs: the casinos themselves, led by their lobbying organization, the American Gaming Association (AGA). Their message:
There was a public hearing on this issue in early June, but I had not heard one peep out of the IRS – or anyone else – about this whole topic since then. Until the beginning of this week, that is; that's when Geoff Freeman, Chairman and CEO of the American Gaming Association, announced that the IRS was backing away from the threshold-revision idea, after an unanticipated response to the proposal in the industry, "as representatives of tribal and commercial gaming spoke 'with one voice' in opposing it" and tens of thousands of members of the public wrote in to voice their dismay, criticizing the plan as "crazy," "unbelievable" and "ludicrous." Time will tell, but it's looking as though this proposed ruling may just slope off into a corner and hope that everyone forgets it ever reared its head.
