IRS to poker winners: Pay up!

[feltman]

IRS to poker winners: Pay up!

WASHINGTON (AP) — They're not bluffing: Tax collectors will start requiring poker tournaments to report the winners' take.
Casinos and other sponsors of poker tournaments will be required to report winnings of more than $5,000 to the Internal Revenue Service beginning March 4, 2008, the tax agency said Friday.

Sponsors who meet the reporting requirement won't need to withhold federal income tax at the end of a tournament, it said.

If a sponsor does not report winnings, it is responsible for withholding the taxes and sending the money to the IRS, normally 25% of the amount subject to reporting.

The IRS said poker tournament winners must provide their taxpayer identification number, usually a Social Security number, to the sponsor. If the winner fails to do so, the sponsor must withhold federal income at a rate of 28%.

http://www.usatoday.com/news/washing...terstitialskip

[SenatorKevin]

Old news but never was news.

You mean you have to report income to the IRS!? Find out more in this weeks publication of DUH.

[DesertCat]

Any enterprise that requires you commit tax evasion for it to be a worthwhile career choice ain't much of a career.

[w_alloy]

Does this mean we didn't have to pay taxes before?

HYACHAHCHACHACHACHHCHA

[arcdog]

this explains why my phone continues to be quiet. they start coming after losers and most of us are royally screwed.

[pologuy64]

hello Yesterday!

[grapabo]

Some of this is in fact new. Not on the obligation of players to report, but on tournament sponsors to report and possibly withhold taxes from winnings.

Link to IRS press release dated today

The headline on the AP story really distorts what this story is about.

[Crazy Porto]

just tournaments?

[faarcyde]

Tax question: If a person wins a big tourney for say a million dollars (no Brad Booth joke intended), then went busto trying to play nosebleed stakes in the same fiscal year, would that person still be responsible for paying taxes on his tournament winnings?

[grapabo]

In general, non-pros can claim gambling losses up to their gambling winnings if they itemize, and pros can net their gambling wins by gambling losses as business income, without having to itemize their deductions, up to their gambling winnings.

I'm more familiar with the general tax rules than with the pro poker player side, so take my word with a grain of salt vs. someone who has specific experience filing returns with significant poker winnings.

The legislation forum should have some threads on these types of questions.