IRS announces new poker tax rules
Casinos and poker tournament organizers will have to report players’ winnings to the Internal Revenue Service under new legislation due to come into effect early next year.
According to an announcement from the US government, tournament sponsors will be legally required to report winnings in excess of $5,000 to the tax authorities in a drive to clear up the grey areas within the industry over the issue.
At present, some confusion exists regarding whether or not tournament sponsors who hold money for poker players are obliged to report winners and withhold taxes on them.
The IRS said in a statement that the initiative would “clear up confusion about the tax reporting rules that apply to poker tournaments”.
The news comes soon after the IRS announced that it would not follow through on plans to collect an automatic 25 per cent tax cut on any poker winnings obtained at a live tournament with a prize of $5,000 or more.
Given that the new legislation means casinos and gaming operators will not be responsible for collecting taxes but simply reporting any winnings, the move is likely to be welcomed within the industry.