06/09/2016 3:56PM

Federal bill seeks changes in reporting of parimutuel winnings


A federal bill providing funding for the IRS and other agencies includes language asking federal tax authorities to consider changes to the taxing and reporting of parimutuel winnings that would be beneficial to horseplayers, according to the National Thoroughbred Racing Association, which has been lobbying for the changes.

The bill, which was passed out of the House of Representatives Committee on Appropriations on Thursday, “encourages the Treasury to expedite final consideration of the guidance which would modernize the rules governing parimutuel wagering,” according to a copy of the language provided by the NTRA.

The NTRA and a slate of federal legislators have recommended that Treasury and the IRS allow horseplayers to include all of the wagers made in a single pool in order to calculate tax liability. The effect of a change of the tax treatment likely would be a dramatic decline in the number of winning wagers that trigger tax-reporting requirements or the automatic deduction of federal taxes.

“We are immensely grateful to the committee and its chairman, Rep. Hal Rogers, for including this language in the bill,” said Alex Waldrop, chief executive of the NTRA. “Achieving fair and modern taxation of parimutuel winnings remains one of the NTRA’s highest priorities, and this is another step in the right direction.”

Rogers is a Republican from Kentucky who has supported the NTRA efforts.

The NTRA has lobbied for a number of years for changes to tax policies that would be beneficial to horseplayers, without measurable success. Last year, it changed tack by abandoning efforts to support specific legislative language providing for the tax changes, instead going straight to Treasury and the IRS to push for the measures.

The language in the bill passed out of committee on Thursday does not require the Treasury Department to act on the request, but the NTRA said “it provides additional support to modernize current tax regulations.”

Sal Carcia 12 months ago
No matter how much ones declares a loss against the winnings, the IRS still counts the winnings into the Adjusted Gross Income (AGI). This could easily bump one up into a higher tax category.

Hopefully, this new law will reduce the number W2-G slips that get sent to the IRS.