Congress within 90 days of enactment on the feasibility of updating the threshold within the Department’s authority.
Treasury Has the Regulatory Authority to Update the Slot Reporting Threshold and Has Exercised Such Authority in the Past. The history of Treasury’s regulations on the slot jackpot reporting threshold underscores that Treasury has regulatory authority to update the threshold. Treasury described this regulatory history in the preamble to the proposed version of Reg. § 1.6041-10: “Section 6041 generally requires information reporting by every person engaged in a trade or business who, in the course of such trade or business, makes payments of gross income of $600 or more in any taxable year. The current regulatory reporting thresholds for winnings from bingo, keno, and slot machines deviate from this general rule. Prior to the adoption of the current thresholds in 1977, reporting from bingo, keno, and slot machines, was based on a sliding scale threshold tied to the amount of the wager and required the wager odds to be at least 300 to 1. On January 7, 1977, temporary regulation §7.6041-1 was published establishing reporting thresholds for payments of winnings from bingo, keno, and slot machine play in the amount of $600. In Announcement 77-63, 1977-8 IRB 25, the IRS announced that it would not assert penalties for failure to file information returns before May 1, 1977, to allow the casino industry to submit, and the IRS to consider, information regarding the industry’s problems in complying with the reporting requirements. After considering the evidence presented by the industry, the IRS announced in a press release that effective May 1, 1977, information reporting to the IRS would be required on payments of winnings of $1,200 or more from a bingo game or a slot machine play, and $1,500 or more from a keno game net of wager. On June 30, 1977, § 7.6041-1 was amended to raise the reporting thresholds for winnings from a bingo game and slot machine play to $1,200, and the reporting threshold for winnings from a keno game to $1,500.” The amendment to Reg. § 7.6041 raising the slot reporting threshold to $1,200 in 1977 was “issued under the authority contained in section 7805 of the Internal Revenue Code of 1954.” (Treasury Decision 7492, 42 Federal Register 33286 (June 30, 1977). Code section 7805 provides that “the Secretary shall prescribe all needful rules and regulations for the enforcement of this title.” We thank you for working closely with the gaming industry to implement a regulatory change to correct this antiquated policy. If you have any questions regarding the matters discussed herein, please contact Chris Cylke at ccylke@americangaming.org or Jason Giles at vlittle@indiangaming.org. Thank you for your time and consideration.
William C. Miller, Jr. President & CEO
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