Proposed Changes: Notice 2015-21

     There have been a lot of changes in the gaming industry since the IRS wrote its rules for reporting gambling transactions back in 1977. Technology has evolved significantly. Slot player cards and electronic slot machines were still to come. On line and mobile gaming didn’t exist at all. Wins were reported to the IRS by the casinos on paper forms. E-filing was unheard of at the time.

     After 38 years, change may finally happen. (Big sigh of relief!) We have seen how quickly the government moves on these types of things. Lets hope the change is one that benefits us all. IRS promises sometimes need to be taken with a grain of salt, and we’ll keep our fingers crossed.

     On March 3, IRS published Notice 2015-21 detailing a “Safe Harbor Method for Determining a Wagering Gain or Loss from Slot Machine Play.” The proposal defines a daily session for slot machine play where there are electronic records, and how wins and losses are reported — mostly by the casino but also to some extent by the player. I’ll go into detail about some of these proposals in a later entry. You can read through the entire notice on the web now if you don’t want to wait, but be warned, tax talk can be kind of dull. None of any changes adopted will go into effect before January, 2016.

     IRS will be holding a public hearing at 10 am on June 17 in Washington DC in order to gauge public opinion on the changes. You will need to register to attend. Written or electronic comments must be received by June 2. Usually, most of the discussion will be led by lawyers, CPAs, enrolled agents, and other tax professionals, but it doesn’t have to be that way. This is the opportunity for all of us gamers who are affected by this to have our say. While if may be difficult, and you might think they won’t listen, this is our chance. And here is how to do it:

     Hand deliver or mail comments to: Room 5203, PO Box 7602, Ben Franklin Station, Washington, DC, 20044

     Electronically you can comment at: Notice.comments@irscounsel.treas.gov
     Attend the public hearing: IRS Auditorium, 1111 Constitution Av, Washington, DC

     The IRS is asking for comments on specific issues. according to its notice. Specifically, taxpayers should comment on:

• Alternative definitions for the term “slot machine”
• Whether an interruption in play should result in more than a single session; 
• Whether a session should be based on a period other than a calendar day;
• Whether the definition of a single session should be determined by other factors;
• Whether the safe harbor should include merchandise and bonus reward payouts;
• Whether a safe-harbor method should be developed for other forms of gambling

     If you have other comments, include them too. You may not get another chance for another 38 years!