(Publisher’s Note: The deadline to submit comments to the IRS on this issue is Tuesday June 2, 11:59 p.m. EST)
According to Joan Morgan, it’s a “crazy, crazy proposal.” To John Ridge of Scottsville, N.Y., it’s “unbelievable.” To Nicholas Lassen of Las Vegas, it’s “ludicrous.”
Their blunt assessments sum up much of the public reaction to the possibility of the Internal Revenue Service requiring casinos to issue W2-Gs for slot jackpots of $600 or more, half the current $1,200 threshold.
The IRS proposal has attracted more than 2,600 comments at www.regulations.gov. Some are from organizations responsible for issuing the tax forms, including Native American casino operators, the South Dakota Lottery Commission and the National Thoroughbred Racing Association. Representatives of the American Gaming Association have voiced objections to IRS officials, and President and CEO Geoff Freeman plans to make a public statement about it on June 1. That’s the day before the deadline to submit comments on a seven-page IRS proposal to “update and simplify” tax regulations for slot, keno and bingo winnings.
The organizations cite concerns such as increased operational costs, negative impacts on tax revenue, procedural deficiencies and potential harm to “the customer experience.” For more plainspoken reviews, here’s a sampling of individuals’ comments posted on www.regulations.gov:
Brian Thompson: “This is an atrocious idea that will force many players out of gaming. If anything, the W2-G limit should be raised to $2,000. … I will most assuredly cancel my three to five Vegas trips per year if this passes. I can gamble in the Caribbean without this nonsense.”
Barry Dewlen of San Antonio: “For the majority of retirees, of which I am one, the standard (income tax) deduction is greater than their itemization total. So I cannot really use my losses to offset my $1,200-and-over wins.”
Jack Stevens: “My wife and I enjoy visiting Las Vegas and playing the slot machines. I am 90 years of age and my wife will reach 90 on 14 June. … (If the threshold is lowered) we would probably seek others forms of entertainment, reducing the amount of money we leave in Las Vegas.”
James: “Most winnings below $1,200 accrue to senior citizens playing for entertainment at low-level betting. These winnings are infrequent and are most often the result of long hours playing.”
Anonymous: “I have been at casinos where a number of people in our group were lucky enough to win in excess of $600. Can you imagine having to hold our bus since we had to wait for the winners to fill out these tax forms?”
Nicholas Lassen of Nevada: “The gaming bars and slot facilities located outside of a traditional casino seem to be impacted the most by this proposed rule change. They will have to do a huge amount of additional paperwork. These types of gaming establishments already run on a far lower margin than your typical casino, and it would have a huge impact on their bottom line. This rule seems to target the recreational gambler.”
Anonymous 16: “I have served as an attorney with the Tax Division of the Department of Justice and have lived in Las Vegas for more than 30 years. … The proposed rule burdens the casinos unfairly and impacts taxpayers who are unlikely to have net winnings.”
Anonymous: “With gambling opening up everywhere and the huge income it produces for casinos, the efforts to tax individual gamblers who face devastating odds playing these games is simply wasted effort.”
Anonymous New Jersey resident: “Changing this (W2-G) rule means (players) will have more taxable income on gambling, even though they are net losers in the casinos. I believe many people will just stay home and find another way of entertaining themselves. I personally would gamble less.”
T Henneka: “Lowering the W2-G threshold to $600 will cause vastly more machine lockups while the paperwork is being processed. This is very bad for the casinos and also bad for the players who are playing during a vacation and have a limited amount of time.”
Beth Warner: “I am a recreational gambler for many years. I have had the great fortune to twice win a $1,200 jackpot. I have won perhaps four $600 jackpots. The pleasure of winning anything is decreased by the bother of waiting to fill out paperwork for the IRS and then do it all over again at tax time. … Is our government so broke that we have to hurt the little guys even more?”
Anonymous27: “Each year, I lose far more than I win, but any winnings become part of Adjusted Gross Income. This increase the amount I must pay for Medicare each year. It also affects the subsidy allowed under the Affordable Care Act, the amount of deductions allowed and many other (tax) calculations. Reducing the reporting requirement to $600 would only exacerbate this problem.”
Odi O’gambit: “To lower instead of increase the threshold is really increasing dramatically the injustice of (tax) rules. It really appears to be a scheme to ‘soak the losers’ even more.”
Michael Frankel of Las Vegas: “For those of us who are ordinary players of 25(-cent) machines, there is no expectation that when we win a $1,000 payout we will keep it. Why do you think there are these grand casino buildings?
Anonymous 6, from Connecticut: “I am a frequent casino patron who spends – loses – about $10,000 per year gambling. I keep a gambling log and pay my taxes according to the letter of the law, which, as a result of repeated small gambling wins interspersed among many more losses, makes my Adjusted Gross Income about $20,000 higher than it should be. … This change will virtually end my gambling hobby. Not only will the struggling casinos lose out on profits, but the state of Connecticut will also lose out on its 25 percent share.”
Anonymous: “Many retired seniors consider this type of activity a hobby and enjoy it several times per week, most likely losing a reasonable amount they can afford. The current rules result in reporting requirements that seem to indicate on the surface that these people have been big jackpot winners …. despite being net losers for the year – and indeed on many of the days in which the jackpots were hit.”
Susan Anonymous: “Over the course of a week (on vacation), I may ‘win’ $600 several times and lose it back. It sounds strange to a nongambler, but I enjoy the overall experience. Bottom line is, if I have to report every $600 I win, it will make me and my accountant crazy and probably not (be) worth the hassle. I would rather sit home and knit.”
Kaitlin Hentschel: “Our customers deserve the chance to enjoy themselves, and we deserve the chance as gaming owners for 24 years to keep our business and our city alive. … Please don’t pass this absurd proposal. Give our family-owned and –operated business the chance to survive another 24 years!”
Arthur Villa of Mission, British Columbia: “My wife and I frequently visit casinos just across the border in Washington state. We spend – a nicer term than lose – approximately $3,000 annually on gambling entertainment in Washington, plus travel occasionally to Las Vegas and Wendover. Should the (W2-G) limit be reduced to $600, we would curtail our play considerably. In fact, as there is no tax on gambling winnings in Canada but lots of casinos, we would likely all but eliminate our play at American casinos. … I hope that common sense prevails and that the current limit remains.”
Teresa Alexander: “When I first began gambling in 1991, my typical wager was 25 cents. Now my typical wager is anywhere from $2.50 to $5. The amount I spend certainly outweighs the amount I win. This (proposal) is preposterous and wouldn’t be tolerated in any other facet of our tax law.”
Speak your mind
The IRS proposal is at http://www.regulations.gov/#!documentDetail;D=IRS-2015-0006-0001, and public comments will be accepted until 11:59 p.m. EDT June 2. Comments may be made at the site by using the “Comment Now” tab.
