The Treasury Department and IRS today released for publication in the Federal Register proposed regulations (REG-132253-11) concerning information reporting of winnings from bingo, keno, and slot machine play pursuant to section 6041.
The proposed regulations [PDF 261 KB] concern information reporting of payments from winnings of $1,200 or more from bingo and slot machine play and $1,500 or more from keno.
In a related development, the IRS today released an advance copy of Notice 2015-21 [PDF 40 KB] as a proposed revenue procedure that, if finalized, would provide an optional safe harbor method for individual taxpayers to determine a wagering gain or loss from certain slot machine play
Since 1977, when the current regulations governing information reporting of winnings from bingo, keno, and slot machine play were published, there have been changes in gaming industry technology. As noted in the preamble to today’s regulations, many gaming establishments now employ electronic slot machines and other mechanisms, such as player’s cards, that permit electronic tracking of wagers and/or winnings. Also, there have been changes in the tax information reporting regime since the late 1970s, such as the enactment of backup withholding and requirements for electronic filing of information returns, including the Form W-2G, Certain Gambling Winnings.
Current temporary regulations do not reflect either the changes in the gaming industry or in the tax information reporting regime. Accordingly, the IRS and Treasury have decided to update the regulations for reporting winnings from bingo, keno, and slot machine play in an effort to reduce burden and simplify reporting.
The proposed regulations retain a general rule from the temporary regulations that every person engaged in a trade or business who, in the course of its trade or business, pays reportable gambling winnings must make an information return with respect to such payments.
The proposed regulations are proposed to apply to payments made on or after the date the regulations are adopted as final in the Federal Register. A public hearing on these proposed regulations is scheduled for June 17, 2015.
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