Government urged to update “antiquated” figure
The American Gaming Association (AGA) is calling on the United States government to increase the threshold for reporting slot jackpot wins. Current rules state that jackpot slot machines have to be put out of production until the jackpot winners have submitted the relevant tax reporting form.
The threshold for reporting a jackpot win of this kind stands at $1,200. If a player pockets a bigger jackpot prize, they have to submit a W2-G form, according to the protocol that has been in place since 1977.
current threshold is outdated and imposes significant compliance burdens”
AGA chief executive and president Bill Miller highlighted in a press release that the increase would be especially important now that casinos in the country are beginning to reopen following mandatory pandemic closures. All 989 tribal and commercial casinos across the country have been shut down for two months.
He said: “The current threshold is outdated and imposes significant compliance burdens on both the Internal Revenue Service (IRS) and the gaming industry.” The title of the press release also referred to it as “antiquated”.
The AGA presents its arguments
The AGA argues that if the threshold limit of $1,200 from 1977 had to be adjusted for inflation, the current starting point would be higher than $5,000. It pointed out that the number of reportable jackpots has increased significantly in recent years, while the threshold figure has remained the same.
current starting point would be higher than $5,000
If the threshold was increased, the IRS could also focus its limited enforcement resources on taxpayers who are likely to have net slot winnings at year end. Miller touched upon how the large amount of submitted forms each year only floods “an under budgeted and understaffed IRS each year.”
Miller stated that the policy change is long overdue and has received bipartisan support from Congressional members.
A catalyst for the proposal
This latest request from the AGA comes after President Donald Trump issued an executive order on May 19 related to post-pandemic economic recovery.
The Executive Order on Regulatory Relief to Support Economic Recovery requests that federal agencies help the country to minimize the economic fallout of the pandemic as much as possible. This would be through removing, altering, waiving, or offering exemptions from certain requirements and regulations that could inhibit economic recovery.
The IRS tried to lower the threshold to $600 in 2016 but was persuaded otherwise by the AGA. The plan was to utilize player loyalty cards to electronically track the wins of a given player.