Waldrop to testify for tax-law changes

Alex Waldrop, the chief executive officer of the National Thoroughbred Racing Association, will appear before a hearing of Treasury and IRS officials on June 17 in Washington, D.C., to give testimony in support of proposed changes to tax laws that would be beneficial to horseplayers, according to a copy of the hearing’s agenda and speaker list.

The NTRA had requested that Waldrop be allowed to provide testimony to the panel, which will include three officials of the IRS and an attorney and advisor to the Treasury Department, according to a notice issued Friday. The panel is scheduled to discuss proposed changes to rules on reporting gambling winnings to the IRS, including changes that would likely significantly reduce tax liabilities for horseplayers.

The NTRA had earlier organized a petition drive from horseplayers and industry participants urging them to support the changes. The drive resulted in more than 11,000 responses.

Waldrop will be allowed to provide 10 minutes of prepared testimony, and he is expected to face questions from the panel on the impact of the proposed changes. Waldrop is among five witnesses on the panel. The other four will testify in support of changes that would reduce the requirements for tax reporting and withholding for gambling winnings on keno, slot machines, and bingo, a measure that is expected to draw more attention than the changes to the tax code on parimutuel winnings.

The changes would allow horseplayers to count the total amount wagered in a pool to determine liability for reporting and withholding taxes. The current rule requires reporting to the IRS any bet that pays off at greater than 300-1 odds based on the denomination of the winning bet, and it requires automatic withholding for any bet that pays off at greater than 300-1 odds and in excess of $5,000.

If government officials decide to pursue the changes, the IRS and Treasury are expected to draft a formal rule sometime after the panel convenes. A new public-comment period will likely follow the drafting of the rule, according to officials.