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Title: New IRS Tax Witholding Guidelines in USA and Poker Tournaments Post by: Harry Demetriou on October 11, 2007, 07:50:08 AM A few days ago I sent an e-mail to Jeffrey Pollack (Commissioner for The WSOP) in order to try and get clarification on this subject as it had rasied some concerns amongst overseas players and what was likely to ctually happen.
I also contacted The IRS and a couple of others but JP's response is the only decent one I recieved and is included below. Jeffrey Pollack's Reply: We are familiar with the recent IRS pronouncement regarding the treatment of poker winnings and I'm glad you've asked me to clarify the position of the WSOP -- especially since we've seen some reports that offer misleading speculation about what we will do regarding tournament winnings. Here are the facts: 1. The new regulation raises the threshold for reporting poker tournament winnings to the IRS. 2. To date, casinos have been required to issue forms to the IRS and to individuals if the individuals won more than $600 in a poker tournament. 3. The new regulation, which becomes effective next March 4, raises that threshold to $5,000 (net of entry fees). 4. Some news organizations have reported that casinos will be required to withhold 25 percent of the winnings once that $5,000 threshold is reached, but such reports are inaccurate. 5. Casinos are not required to withhold money from such winnings as long as they provide a W2G or 1042S Form to the IRS reporting the winnings AND as long as the person winning the money is from a country that has a Tax Treaty with the United States and also has an Individual Taxpayer Identification Number (ITIN). 6. If an individual is not from a Tax Treaty country and doesn't have an ITIN, casinos are required to withhold 30 percent of the winnings and to turn those funds over to the IRS. The individual can then file a request for a refund with the IRS. 7. The WSOP will not be withholding any money for taxes from players who live in the U.S. or a Tax Treaty country and provide either a Social Security number or ITIN. 8. If a non-U.S. player wants to apply for an ITIN, the WSOP will have appropriate forms available at the Rio and will file completed ones with the IRS. 9. If a player doesn't have or hasn't applied for an ITIN, the WSOP will be required to withhold taxes. I hope this information is helpful to you and all the other good people on this forum. I look forward to seeing you at the 2008 WSOP and 2008 WSOP Europe! |