And now, something all Southern Nevadans can get behind: preventing more unwanted, costly IRS intrusion.
Today in Washington, the Treasury Department and the Internal Revenue Service will hold a long-awaited public hearing on the tax agency’s plan to reduce the reporting threshold for slot, keno and bingo winnings. Under current IRS regulations, casinos must report payouts of at least $1,200 on a slot machine jackpot or bingo game and winnings of at least $1,500 in keno. The IRS wants to cut that figure to $600.
The casino industry and gamblers have united in opposition to the terrible proposal, bombarding the IRS with thousands of public comments over the past three months protesting the regulation. And their unhappiness goes far beyond the higher costs associated with a reduced reporting requirement — gamblers would see their winnings reduced, and casinos would be burdened by the time it would take to prepare more W2-G forms, reset slot machines and track winnings.
The IRS plan is especially meddlesome because the agency wants to use casino player’s cards to track gamblers’ wagers and winnings.
If any of the millions of people who have casino player’s cards thought there was the slightest chance the IRS would get full access to their wagering and spending histories, we’d bet they never would have signed up in the first place. In fact, many gamblers likely have cut up those cards already. Who wants to provide the IRS with even more personal information?
“The gaming industry is aware of no other industry in the country for which the IRS has issued regulations requiring the industry to deploy its customer loyalty program for federal tax collection purposes,” American Gaming Association CEO Geoff Freeman said in comments issued to the IRS this month.
Indeed, if this destructive regulation is approved, what’s stopping the IRS from taking a similar approach to airline, retail and restaurant rewards programs? Millions of Americans collect more than $600 per year in free commercial flights. If the airline industry had to report frequent flier points to the IRS, the cost of doing do would cause a decrease in rewards and a decrease in customer participation.
Of course, the airline industry is a less inviting target to the IRS than the gaming industry. Despite the growth of legal, regulated casino gambling across the United States, the IRS heaps unusual and borderline unlawful scrutiny on the $240 billion gaming industry. IRS agents require casinos to report “suspicious activity” by customers, including some political expression protected by the First Amendment. And we know the IRS loathes conservatives even more than it hates casinos.
The casino industry expects the rule to become such a nuisance that customers gamble less. A Wall Street analysis estimates the regulation would cause $530,000 in annual losses per casino. And that will lead to reduced tax collections, as well.
As we’ve suggested before, a far more reasonable approach would have the IRS increase the jackpot reporting requirements, which haven’t been adjusted since 1977 — when Nevada had what amounts to a casino gambling monopoly. And any action that results in a tax increase or a tax cut should be authorized by Congress, not through regulatory fiat.
We hope the IRS gets an earful at today’s hearing and scraps this nosy, misguided plan.