They're not bluffing: Tax collectors will start requiring poker tournaments to report the winners' take.
Casinos and other sponsors of poker tournaments will be required to report winnings of more than $5,000 to the Internal Revenue Service beginning March 4, 2008, the tax agency said Friday.
Sponsors who meet the reporting requirement won't need to withhold federal income tax at the end of a tournament, it said.
If a sponsor does not report winnings, it is responsible for withholding the taxes and sending the money to the IRS, normally 25 percent of the amount subject to reporting.
The IRS said poker tournament winners must provide their taxpayer identification number, usually a Social Security number, to the sponsor. If the winner fails to do so, the sponsor must withhold federal income at a rate of 28 percent.
Casinos and sponsors of tournaments completed before March 4 next year will not be required to report winnings to the IRS or withhold tax.
By law, the winners already must report poker earnings on their federal income tax returns.
Yeah, just imagine if the IRS missed a few dollars; the Pentagon might not be able to buy their full quotas of $200 hammers and $600 toilet seats. Still, this reminds me of a couple of jokes:
The IRS Audit
The Internal Revenue Service decides to audit Ralph, and summons him to an appointment with the toughest auditor in the office. The IRS auditor is not surprised when Ralph shows up with his attorney.
The auditor says, "Well, sir, you have an extravagant lifestyle and no full-time employment, which you explain by saying that you win money gambling. I'm not sure the IRS finds that believable."
"I'm a great gambler, and I can prove it," says Ralph. "How about a demonstration?"
The auditor thinks for a moment and says, "Okay. Go ahead."
Ralph says, "I'll bet you a thousand dollars that I can bite my own eye."
The auditor thinks a moment and says, "No way! It's a bet."
Ralph removes his glass eye and bites it.
The auditor's jaw drops.
Ralph says, "Now, I'll bet you two thousand dollars that I can bite my other eye."
The auditor can tell Ralph isn't blind, so he takes the bet.
Ralph removes his dentures and bites his good eye.
The stunned auditor now realizes he has wagered and lost three grand, with Ralph's attorney as a witness. He starts to get nervous.
"Want to go double or nothing?" Ralph asks. "I'll bet you six thousand dollars that I can stand on one side of your desk and pee into that wastebasket on the other side, and never get a drop anywhere in between."
The auditor, twice burned, is cautious now, but he looks carefully and decides there's no way this guy can manage that stunt, so he agrees again.
Ralph stands beside the desk and unzips his pants, but although he strains mightily, he can't make the stream reach the wastebasket on other side, so he pretty much urinates all over the auditor's desk.
The auditor leaps with joy, realizing that he has just turned a major loss into a huge win. But Ralph's attorney moans and puts his head in his hands.
"Are you okay?" the auditor asks. "Not really," says the attorney. "This morning, when Ralph told me he'd been summoned for an audit, he bet me $20,000 that he could come in here and piss all over your desk -- and that you'd be happy about it!"
And Dear IRS
Enclosed is my 2005 tax return showing that I owe $3,407.00 in taxes.
Put your ad here!
Please note the attached article from USA Today, wherein you will see the Pentagon is paying $171.50 for hammers and NASA has paid $600.00 for a toilet seat.
I am enclosing four toilet seats (value $2400) and six hammers (value $1029), bringing my total remitted to $3429.00. Please apply the overpayment of $22.00 to the "Presidential Election Fund," as noted on my return. You can do this inexpensively by sending them one 1.5" Phillips Head screw (article from USA Today detailing how HUD pays $22.00 each for 1.5" Phillips Head Screws is enclosed for your convenience.)
It has been a pleasure to pay my tax bill this year, and I look forward to paying it again next year.
A Satisfied Taxpayer