TOURNAMENT WINNINGS TAX PROPOSAL ABANDONED

12 October 2007

Pro players breathe a sigh of relief as 25 percent IRS cut is cancelled


The United States IRS proposal to impose a withholding tax of 25 percent of tournament winnings of over $5 000 (see previous InfoPowa reports) has apparently been abandoned.....undoubtedly a source of relief for pro poker players.

Wally Chalmers, Vice President of the American Gaming Association said this week that the proposal was abandoned after an assessment of the rule's viability and following negotiations with the IRS's rules-making group.

American professional poker players can thank the Association's Tax and Finance Task Force for the reprieve, which played an important role in lobbying against the proposal, one that would have both significantly increased land casino administration burdens as well as hitting pros in the pocket.

Instead, winning players will be issued an earnings/tax statement of some form declaring their winnings. This may turn out to be the IRS's Form W-2G, which is used to report miscellaneous income (such as casino-game winnings over $1 199), but the exact form and reporting method to be used is still being negotiated.

Chalmers told the Poker News information site that the AGA and the casino groups it represents are "very pleased that it has worked out the way it has." Chalmers also noted that a new IRS Revenue Procedure will be issued in accordance with the new rule once the final details have been worked out.

Online Casino News courtesy of InfoPowa