GM 17-003

IRS Publishes Final Rule on the Reporting of Gaming Winnings; Tribal Comments Reflected

On December 30, 2016, the Internal Revenue Service (IRS) published in the FEDERAL REGISTER a Final Rule on the reporting of winnings from bingo, keno, and slot machines (pari-mutuel gambling winnings are addressed in a separate rulemaking process). The Rule did not adopt the proposed lower threshold for reporting slot winnings and electronic player tracking provisions which were identified as overly burdensome. The new Rule is effective immediately. A copy is available here:

The publication of the Rule finalizes a rulemaking process that began in March 2015. The final regulations incorporate changes from the proposed rule that reflect these tribal and commercial gaming industry concerns. We briefly describe these provisions of the Rule below.

• Reporting Thresholds. The Rule does not adopt a lower reporting threshold for gaming winnings.
• Electronically Tracked Slot Machine Play. The Rule does not adopt the proposal of creating rules for electronically tracked slot machine play (through the use of a player reward card or similar system) to record the amount a specific individual wins and wagers on slot machine play.
• Optional Aggregate Reporting Method. While the reporting of gambling winnings is required each time a payor makes a payment that meets the reporting threshold, the Rule creates a new optional aggregate reporting method, allowing payors under certain conditions to report the aggregate amount of such reportable gambling winnings on one Form W–2G.
• Payee Identification Requirements. The Rule retains the requirement that the payor must obtain two forms of identification from the payee to verify the payee’s identity. However, the Rule broadens the list of acceptable identification to include W-9 forms as well as tribal member identification cards issued by a federally recognized Indian tribe.

Our firm prepared and submitted comments on behalf of several of our tribal clients on the proposed rule. Please let us know if we may provide additional information on the IRS Final Rule on Information Returns; Winnings from Bingo, Keno, and Slot Machines.