UPDATE: The IRS has just proposed a significant change that could impact casino gamblers across the nation. The agency is recommending an increase in the jackpot handpay limit from the long-standing figure of $1,200 to $5,800, a move that could relieve both players and casinos of regulatory burdens.
This urgent update comes amid growing frustrations over the outdated threshold, which has remained unchanged since 1977. The recommendation was supported by IRS Commissioner Danny Werfel, who acknowledged the need for updated thresholds during a recent congressional hearing.
Currently, when a player wins $1,200 or more on slot machines, the machine freezes, requiring an attendant to issue a W-2G form for tax reporting. The wait can be long and frustrating for players who cannot continue gambling while they await assistance. Many gamblers argue that the current limit is out of touch with inflation, with U.S. Representatives Dina Titus and Guy Reschenthaler highlighting that the purchasing power of $1,200 today equates to about $6,200.
In a statement, Reschenthaler explained, “Because the threshold has not kept up with inflation, it has resulted in a drastic increase in reportable jackpots, which trigger tax burdens for winners and compliance burdens for casinos.” He emphasized that increasing the threshold is essential for supporting jobs and economic growth in the gaming industry.
The proposed change has garnered attention from both players and casino operators, who have long expressed dissatisfaction with the current system. Casinos are required to allocate resources to handle the paperwork associated with each hand pay, creating inefficiencies in their operations.
The IRS Advisory Council’s recommendation marks a pivotal moment in the ongoing conversation about gaming regulations in the U.S. As Congress reviews this proposal, the gaming community and legislators alike are hopeful for a swift resolution that addresses these longstanding concerns.
Next steps include a thorough evaluation by the Treasury’s Office, which holds the final authority on such regulatory changes. Stakeholders are advised to stay tuned as developments unfold.
This change could have far-reaching implications not only for the gaming industry but also for the many gamblers who experience the frustration of the current handpay process. As this story develops, players and casino operators alike are eager for updates.
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