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The IRS has decided that every poker operator in the United States will have to report anyone who wins more than $5,000 in a poker tournament. To get around the fact that Congress never authorized this, IRS is pretending to require that 25% or more of these winners' prizes have to be withheld by the poker operators and forwarded to the IRS. "The IRS will not assert any liability for additional tax or additions to tax for violations of any withholding obligation with respect to amounts paid to winners of poker tournaments... provided that the poker tournament sponsor meets all of the requirements for information reporting" under the tax code and regulations. What this means is the IRS has declared that poker tournament operators are absolutely required to withhold at least 25%, but that the IRS won't add any tax penalties or fines to operators who voluntarily turn in their big tourney winners. What apparently happened was that when word got out that the IRS was going to devastate poker tournaments, land-based casinos lobbied for a compromise. This is exactly what lobbyists are supposed to do, assuming they cannot get the regulator to completely drop the idea. The result is better for players. As one example: If withholding were required, anyone who won a $10,000 buy-in to the WSOP would actually collect only $7,500. Now, the player wins the seat, but is reported on a Form W-2G to the IRS. Of course, this is still bad news for winners. A W-2G is practically an invitation to be audited. The compromise has created other problems. Some land-based card clubs and casinos are withholding while others are not. This is not just because this "waiver of liability," as the IRS calls it, is hard to find and decode. Conservative lawyers and accountants might still advise their clients to send a chunk of big winners' prizes to the IRS. The problem is that the IRS says it is interpreting the Internal Revenue Code, which contains criminal penalties for non-compliance. Notice that the IRS only promised not to impose "additional tax or additions to tax." Plus, the actions of the IRS are highly questionable. When people think of laws, they naturally think of statutes passed by legislatures, like Congress. Every adult knows there is another set of laws that is at least as important in their everyday life: regulations from government agencies, like the IRS. Both statutes and regulations require public input. We know what happens when the public is not allowed its say. You end up with statutes like the Unlawful Internet Gambling Enforcement Act, or this new rule on poker tournaments from the IRS. For the IRS did not propose a regulation. Nothing was published. There was no opportunity for card rooms, let alone players, to object. The IRS simply declared that it was reinterpreting a law passed by Congress in 1976, containing a term, "wagering pool," which dates back to the 1950s. Nobody, before now, thought "wagering pool" included poker or other games. In fact, everyone knew it didn't, because it is exclusively lumped in with lotteries and bookmaking. The IRS has now declared that when Congress required withholding of "wagering pools," it meant to include poker tournaments. But, the IRS is giving a free pass to every card room and casino which openly violate a law passed by Congress, so long as they voluntarily turn in their big winners. Professor I Nelson Rose is recognized as one of the world's leading authorities on gambling law, and is a consultant and expert witness for governments and industry. His latest books, GAMING LAW: CASES AND MATERIALS and INTERNET GAMING LAW, are available through his website: GAMBLINGANDTHELAW.com. The IRS has decided that every poker operator in the United States will have to report anyone who wins more than $5,000 in a poker tournament. The recent successful Asian Poker Tour (APT) in Macau , and the Asia Pacific Poker Tour (APPT) underway at Macau's Grand Waldo Hotel and Casino both reflect how Texas Hold'em poker is set to take the Asian region by storm, according to Timothy Chui of the Hong Kong Standard. This week, the Grosvenor UK Poker Tour (GUKPT) returns to the Grosvenor casino in Bolton, where the very first GUKPT event was hosted back in January 2007. On that occasion Londoner Praz Bansi defeated a field of 197 players, including his close friend Karl Mahrenholz, who finished as the runner up. Poker Battle, the new poker "social networking" brand premiering this month, relayed that they recently added several more top poker pros to their growing list of "Warriors" for its September 2 soft launch on the Partouche Poker Tour in Cannes, France. The new warriors include: David Benyamine, Chris 'Jesus' Ferguson, Phil Ivey, Erica Schoenberg, pro gamer 'Fatality' Glen Chorny and Nenad Medic. 20-year-old Yevgeniy Timoshenko, a highly rated player from the United States and of Ukrainian descent, made history by winning the APT Macau, Asia's largest guaranteed tournament at the glamorous Galaxy StarWorld. The Poker Players Alliance (PPA) will have to stop any premature celebrating. Not long after the Republican Party removed its online gaming prohibition platform, much to the delight of the PPA, moods were soured after an online gaming clause was once again added. Poker night on ESPN is about to get a lot more interesting. Tuesday installments of the 2008 World Series of Poker series will begin airing Main Event episodes, starting with the September 2nd show. A new Main Event episode will be shown each Tuesday until you are able to watch the "November Nine " battle almost-live on November 11th. Gearing up for the sixth annual Borgata Poker Open, which culminates with the World Poker Tour (WPT) Championship event September 14-18, Borgata Hotel Casino & Spa conducted its first-ever Borgata Poker Open VIP Access super-satellite event on Sunday. The $1,000 buy-in + $100 entry No Limit Hold'em event awarded one in every twenty-five participants a $25,000 VIP Access Prize Package, consisting of $15,000 in cash and a $10,000 seat into the Borgata Poker Open- WPT Championship, which, for the first time ever, Borgata is guaranteeing a $5 million prize pool. Have no fear, poker fans to the north. Next week, the World Poker Tour (WPT) will air the first of four episodes of WPT Canada. The series, which will air on Rogers Sportsnet, is the first WPT series dedicated solely to Canadian events. All Poker and free play poker content 2008 Advanced Global Applications, LLC. All rights reserved. This is cache, read story here
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