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

Representative Dina Titus opposes the proposed regulations because they implement a tax law that allows for "phantom income" by limiting wagering loss deductions to 90 percent of gains. She argues that this policy will drive consumers toward unregulated offshore markets, harm the domestic gaming industry, and is seeking a legislative fix to restore the 100 percent deduction.

Benjamin Jones, a Certified Public Accountant, opposes the proposed rule because it underestimates the economic burden and compliance costs on taxpayers, particularly professional gamblers. He argues that the "minimal impact" finding is flawed, fails to account for "phantom" income, ignores potential decreases in voluntary reporting, and lacks a proper Regulatory Flexibility Act certification for small entities.

Sara O’Connor, a recreational poker player and content creator, opposes the proposed 90% gambling loss deduction cap. She argues that the rule creates "phantom income" by taxing money that was not actually earned, which unfairly penalizes honest, low-stakes players and deviates from economic reality.

Joshua Hamlet of Clarity Tax Counsel PLLC opposes the proposed regulation because it fails to explicitly address how the 90% wagering loss cap applies to professional gamblers' business expenses under §162. He argues that the regulation's silence creates an interpretive gap that results in "phantom income" for professionals and calls for an amendment to clarify the statutory treatment and a re-examination of the economic impact certification.

Derek Brown, an individual taxpayer, opposes the proposed 90% cap on gambling loss deductions, arguing it will unfairly tax supplemental income and drive bettors to unregulated offshore markets. He suggests that if the cap remains, the IRS should allow for "session accounting" that aggregates all wagering activity across all platforms within a 24-hour period.

Representative Dina Titus, via her office, supports the modernization of federal gaming policy, including the updated slot machine jackpot reporting threshold. She also advocates for a legislative solution to restore the 100% gambling loss deduction to prevent "phantom income" taxation.

Todd Witteles, a professional gambler, opposes the proposed action because it would result in an unfair tax liability by preventing the full subtraction of gambling losses from winnings. He argues that the current proposal would force high-volume gamblers to report inflated income and suggests restoring the full deduction of losses against wins.

Joshua Hamlet of Clarity Tax Counsel PLLC opposes the proposed regulation because it fails to explicitly address how the 90% wagering loss cap applies to professional gamblers' business expenses under §162. He argues that the regulation's silence creates an interpretive gap that results in "phantom income" for professionals and calls for a re-examination of the "minimal impact" certification.

The commenter argues that the proposed 90% cap on gambling loss deductions is unjust because it creates "phantom income," taxing individuals on money they did not actually keep. They contend that the rule punishes high-volume bettors and vulnerable individuals with gambling addictions, while also creating perverse incentives for noncompliance.

Sara O’Connor, a recreational poker player and writer, opposes the proposed 90% gambling loss deduction cap, arguing that it creates "phantom income" by taxing money that was not actually earned. She contends that the rule unfairly penalizes honest, low-stakes players and advocates for a return to the previous rule allowing 100% deductibility of losses against winnings.