Extension and Modification of Limitation on Wagering Losses: Increase in Threshold for Requiring Information Reporting with Respect to Certain Payees

Katie Stone, president of The Cleverley Stone Foundation, supports the proposed regulations but argues for specific modifications to ensure they are fair and consistent with case law. She advocates for a "session-based" measurement of wagering gains and losses to prevent "phantom income" and requests specific ordering rules for professional gamblers and updated recordkeeping guidance.

Henry Fung, an individual, supports the proposed action but argues for further modifications to the "information reporting period" definition. He proposes that casinos should be allowed to use an aggregate reporting method of up to one calendar year to report net wins or losses, which he argues would reduce administrative burdens and prevent "phantom income" for gamblers.

Robert D. Probasco, a faculty member and clinic director at the Texas A&M University School of Law, provides comments regarding the reporting of wagering gains and losses. While he does not explicitly support or oppose the proposed regulations, he suggests specific amendments to allow casinos to report winnings on a per-session basis and provide customers with statements of net winnings or losses by session.

The commenter, an experienced tax professional, supports the proposed regulations but requests that the final rules explicitly permit and encourage filings below the new reporting thresholds. He argues that while the threshold increase is a statutory requirement, the regulations should clarify that voluntary reporting remains permissible to ensure consistency with state requirements and to help taxpayers avoid missing income.

The Chickasaw Nation supports the proposed increase in the information reporting threshold from $600 to $2,000, noting it reduces administrative burdens for tribal gaming operations. However, the Nation opposes the proposed modification to the limitation on wagering losses, arguing that the 90 percent deduction limit harms players and tribal revenue while potentially driving users toward unregulated gaming platforms.

The Prairie Band Potawatomi Nation Tribal Gaming Commission supports the proposed increase in the information reporting threshold because it reduces administrative burdens for tribal gaming operations. However, the Commission opposes the proposed modification to the limitation on wagering losses, arguing that it penalizes lawful players and could drive them toward unregulated gaming platforms.