IRS Has a Plan For Your Poker Tournament Winnings

Confused about the Internal Revenue Service withholding rules when it comes to poker tournaments? Well, it won't be long before tournament players are presented with a government solution. Popular forums, online chat rooms, and players at the felt have been debating the Rio's payout and tax procedures, as outlined by Harrah's and the IRS, at this year's World Series of Poker. Different casinos - also considered financial institutions - have different procedures. But on August 15, the Department of the Treasury released its 2006-2007 Priority Guidance Plan. The plan includes a list of 264 tax projects slated to be complete within the next 12 months. Four final regulations listed within the tax administration section include a project on revenue procedures regarding withholding rules applicable to poker tournaments.

With a dramatic increase in high-buy-in events, record-breaking attendance, and enormous prize pools, there's a lot of money changing hands. Televising tournaments has put poker in the spotlight, and though all of these factors have elevated the sport and encouraged growth, it has also made poker more conspicuous. Simply put, with exposure comes … well … being exposed, and it was only a matter of time before the IRS took notice.

This year's WSOP championship event awarded 876 players, and the minimum payout was over $10,000. Eighteen players were paid an amount in the neighborhood of a quarter-million dollars, 12 made around half a million, three men took home just shy of a million, and the rest became millionaires, multimillionaires, or multi-multimillionaires. And that was only one event of 45 in the series. With dozens of major tournaments across the country, the IRS could put a dent in the national debt, and not just with American winnings. Even non-Americans will find themselves giving up a little more juice to stay in action. The good news is that the Treasury's Priority Guidance Plan could set the groundwork for other areas within the poker industry, while once and for all granting the sport some legitimacy.

In either case, poker players won't have to wait long for an answer. "While the list usually grows to keep pace with new IRS or taxpayer concerns, the number of projects scheduled to receive attention this year is nothing out of the ordinary in terms of volume," says Treasury spokesman Sean Kevelighan.

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