IRS Advisory Council supports Nevada reps’ effort to raise slot tax reporting threshold

Under the current, $1,200 threshold, it’s common for slot machines to be shut down until IRS paperwork is filled in about a jackpot.


Congressional leaders such as Rep. Dina Titus (D-Nev.) who have been asking the IRS to raise the tax reporting threshold on slot machine jackpots for nearly a decade received some welcome backing from an unusual source — the agency’s advisory council.

In a decision last November, the IRS Advisory Council said the threshold figure should be raised from $1,200 to $5,800 — $800 more than what members of the Congressional Gaming Caucus have been seeking.

A spokesman for Titus, who first requested the IRS commissioner raise the slot jackpot reporting threshold in 2015, said the office was aware of the news but wanted to wait for the official announcement from the advisory council.

The $1,200 jackpot threshold was established in 1977, when Nevada was the only state with legalized gambling. There are now 44 states with either commercial casinos or casinos operated by Indian tribes.

Exceeding that threshold is commonplace nowadays on slot floors, and proponents of the change said the current figure triggers a shutdown of the slot machine until IRS paperwork requirements, including filling out a W-2G tax form, are fulfilled.

The council wrote the change should be made by regulatory action because that was how the threshold was initially set.

Titus said that legislation the caucus proposed last year to increase the threshold figure isn’t needed based on the advisory council’s decision. In an interview, Titus said IRS Commissioner Danny Werfel should follow the advisory council’s ruling and accept the change through the regulatory process.

“That way, we wouldn't have to get the bill passed,” Titus said. “I feel like having the bill out there has been part of the reason he hasn’t made the change. But now, the commission has encouraged him to (increase the reporting threshold).”

The IRS did not respond to a request for comment.

Titus and Rep. Guy Reschenthaler (R-Pa.), who co-chairs the Congressional Gaming Caucus, wrote in the Feb. 5 letter that the $1,200 threshold is outdated. Gaming has expanded across the U.S. over the past 47 years and $1,200 jackpots are far more common.

“Taking this action will align with the IRS initiative to strategically use data to improve tax administration and modernize tax reporting for our constituents,” Titus and Reschenthaler wrote in the letter that was signed by 24 members of Congress including Titus’ three Nevada counterparts in the House.

“Due to inflation, this outdated standard has significantly increased compliance burdens on taxpayers and operating costs for casinos across the country,” they added.

The American Gaming Association has long backed Titus’ efforts to change the reporting threshold and CEO Bill Miller said Tuesday the IRS commissioner should accept the advisory council’s recommendation.

“The antiquated slot tax threshold creates unnecessary burdens for consumers, casino operators and the IRS,” Miller said.

In its report, the council suggested the current jackpot reporting threshold should be $5,800 when accounting for inflation, but could be increased again based on inflation cost-of-living adjustments each year.

This story was published Feb. 15 by The Nevada Independent and is republished here with permission.


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