Withholding

[Gallop58]

What are the chances of this approach bearing fruit?

http://www.bloodhorse.com/horse-racing/articles/85453/lawmakers-back-change-in-withholding-taxes

Should we all be signing the petition? Would any additional mobilization be useful?

[AndyC]

What are the chances of this approach bearing fruit?

http://www.bloodhorse.com/horse-racing/articles/85453/lawmakers-back-change-in-withholding-taxes

Should we all be signing the petition? Would any additional mobilization be useful?


Of all the tax ripoffs facing horseplayers this one would have to be the furthest down the list of importance.

Let's see. A whale bets $5000 on a P-6 and only gets back $150,000. He has won $145,000 but because of the new proposed rule there is no reporting requirement because the bet wasn't over 300-1 on the total amount bet. That is absurd. You on the other hand could hit a superfecta by betting only $1 and get back $5,002 and have to face reporting and withholding.

My solution to the problem is simple. If you want to avoid withholding you must bet through an account. Withholding would only occur if your account shows you to be a net winner of $5000 or more. So for example, let's say you won $50,000 in January. Your account administrator would restrict you from withdrawing funds that would be needed for withholding. If in the next 3 months you proceeded to lose $50,000 there would be no reason to have withholding on the account. Problem solved.

[thaskalos]

This proposal needs to be expanded beyond the "withholding" aspect of this ridiculous law...and should include those instances where the player is asked to sign an IRS form whenever he collects a payoff of more than 600-1. I mean...the unfairness of the law applies in equal measure there. Why should I play a $160 pick-5 ticket...hit for a $605 return...and then have to sign an IRS form for my supposed 600/1 jackpot -- when the REAL return on my investment is less than 4/1?

The NTRA is being disingenuous here. They care only about the withheld money in the $5,000+ cases, because they know that this money would benefit them directly if it remained in the pockets of the bettors. But they don't care about the injustice perpetrated against the horseplayer when he signs those other signers...because this does not seem to have an adverse effect on the fortunes of the industry.

If you are going to ask for a revision to an unjust tax law...then try to fix it and get it right all the way through. Don't ask to fix just the part that would put more money in your pocket. Pathetic... :ThmbDown:

[AndyC]

This proposal needs to be expanded beyond the "withholding" aspect of this ridiculous law...and should include those instances where the player is asked to sign an IRS form whenever he collects a payoff of more than 600-1. I mean...the unfairness of the law applies in equal measure there. Why should I play a $160 pick-5 ticket...hit for a $605 return...and then have to sign an IRS form for my supposed 600/1 jackpot -- when the REAL return on my investment is less than 4/1?

The NTRA is being disingenuous here. They care only about the withheld money in the $5,000+ cases, because they know that this money would benefit them directly if it remained in the pockets of the bettors. But they don't care about the injustice perpetrated against the horseplayer when he signs those other signers...because this does not seem to have an adverse effect on the fortunes of the industry.

If you are going to ask for a revision to an unjust tax law...then try to fix it and get it right all the way through. Don't ask to fix just the part that would put more money in your pocket. Pathetic... :ThmbDown:

The reporting requirement affects far more players than the withholding requirements. If you are betting in $1 increments, it should take on average 5,000+ bets at odds of 5,000-1 or higher to have 1 payoff subject to withholding.

[ArlJim78]

This proposal needs to be expanded beyond the "withholding" aspect of this ridiculous law...and should include those instances where the player is asked to sign an IRS form whenever he collects a payoff of more than 600-1. I mean...the unfairness of the law applies in equal measure there. Why should I play a $160 pick-5 ticket...hit for a $605 return...and then have to sign an IRS form for my supposed 600/1 jackpot -- when the REAL return on my investment is less than 4/1?

The NTRA is being disingenuous here. They care only about the withheld money in the $5,000+ cases, because they know that this money would benefit them directly if it remained in the pockets of the bettors. But they don't care about the injustice perpetrated against the horseplayer when he signs those other signers...because this does not seem to have an adverse effect on the fortunes of the industry.

If you are going to ask for a revision to an unjust tax law...then try to fix it and get it right all the way through. Don't ask to fix just the part that would put more money in your pocket. Pathetic... :ThmbDown:
If you are correct that it only applies to the withholding aspect then I agree wholeheartedly with you. However I don't read it that way, for example this statement seems to indicate the change should be for both reporting and withholding purposes.

Therefore, for reporting and withholding
purposes, winnings from that pool should be calculated as total proceeds minus
total wagers with respect to that pool

[AndyC]

The NTRA is being disingenuous here. They care only about the withheld money in the $5,000+ cases, because they know that this money would benefit them directly if it remained in the pockets of the bettors. But they don't care about the injustice perpetrated against the horseplayer when he signs those other signers...because this does not seem to have an adverse effect on the fortunes of the industry.

I think the NTRA is heavily influenced by players who really do suffer cash flow problems do to the number of withholding signers they have. I recall a member of the NTRA Player's Panel telling me he had to get loans just to continue his betting. The withholding taken from his winners far exceeded his net winnings.

[Robert Goren]

The IRS will do what it wants whether anyone thinks it fair or not. It is damn fool that does not consider the tax consequences when he is wager and that includes withholding rules. I doubt if the new purposed rules go anywhere unless a Senator gets behind them. Even then it will take years.

[AndyC]

The IRS will do what it wants whether anyone thinks it fair or not. It is damn fool that does not consider the tax consequences when he is wager and that includes withholding rules. I doubt if the new purposed rules go anywhere unless a Senator gets behind them. Even then it will take years.

Most politicians don't want to answer to constituents who ask why they voted for tax breaks for gamblers, regardless of the merits.

[thaskalos]

If you are correct that it only applies to the withholding aspect then I agree wholeheartedly with you. However I don't read it that way, for example this statement seems to indicate the change should be for both reporting and withholding purposes.


In my opinion...the push being made is only for the withholding part of the tax law. The reporting aspect was barely mentioned...and only as an illustrative example.

[ArlJim78]

In my opinion...the push being made is only for the withholding part of the tax law. The reporting aspect was barely mentioned...and only as an illustrative example.
it would be idiotic to change the method of calculating the amount wagered only as it applies to withholding. it would add even more unfairness to an already unfair system. i believe they are stressing that example in order to sell the point that it would immediately put more money in the system. the unfairness aspect of one type of wager being treated differently than another is not as likely to attract sponsors.

[AndyC]

it would be idiotic to change the method of calculating the amount wagered only as it applies to withholding. it would add even more unfairness to an already unfair system. i believe they are stressing that example in order to sell the point that it would immediately put more money in the system. the unfairness aspect of one type of wager being treated differently than another is not as likely to attract sponsors.


Idiotic and politics are not exactly distant cousins. You would think that with 2 congressman collaborating on the letter each with a well-paid staff that they could have written something a little bit more coherent than they did.

[Robert Goren]

Idiotic and politics are not exactly distant cousins. You would think that with 2 congressman collaborating on the letter each with a well-paid staff that they could have written something a little bit more coherent than they did.Not if their hearts weren't in it and they were only doing it for a small contributor. Nobody outside the tracks and a few bettors care about this. The power in horse racing from a political point of view is with the horsemen and their groups. And we all know how they feel about bettors.

[ArlJim78]

Idiotic and politics are not exactly distant cousins. You would think that with 2 congressman collaborating on the letter each with a well-paid staff that they could have written something a little bit more coherent than they did.
I have to agree with you. I support the cause but it was presented poorly if you ask me.

[Jeff P]

I've added a notice about the proposed reporting changes to the HANA site:
http://www.horseplayersassociation.org/articletaxwithholding.html

Subject: Proposed Changes to US Tax Code for Horse Racing Winnings

Yesterday I received a letter from the NTRA asking HANA to join them in support of proposed changes in US Tax code as relates to reporting and withholding for horse racing winnings.

I see this as an important issue - something that should have been addressed years ago.

I signed the petition.

I'm asking HANA members and horseplayers everywhere to do the same.

Please, goto the NTRA site, and sign the petition. Direct link: Here. (http://www.ntra.com/en/news-media/press-releases/2014/6/3/key-lawmakers-seek-tax-reporting-withholding-clarification/)

Alternately, Just SIGN THE PETITION: Here. (https://www.change.org/petitions/u-s-department-of-the-treasury-when-reporting-withholding-winnings-clarify-that-the-entire-amount-wagered-into-a-pool-by-an-individual-will-be-used-to-determine-whether-the-winnings-are-at-least-300-times-the-amount-of-the-wager?recruiter=103240080&utm_campaign=mailto_link&utm_medium=email&utm_source=share_petition)

Letter to the US Treasury: http://www.bloodhorse.com/pdf/LettertoDepartmentofTreasuryIRSTaxes06032014.pdf

Please, take 3 minutes out of your day and MAKE A DIFFERENCE,

Jeff Platt
President, HANA



-jp

.

[AndyC]

I've added a notice about the proposed reporting changes to the HANA site:
http://www.horseplayersassociation.org/articletaxwithholding.html

-jp

.

Jeff,

Given my example below wouldn't it be better to scrap the 300-1 requirement in favor of a net win requirement?

Let's see. A whale bets $5000 on a P-6 and only gets back $150,000. He has won $145,000 but because of the new proposed rule there is no reporting requirement because the bet wasn't over 300-1 on the total amount bet. That is absurd. You on the other hand could hit a superfecta by betting only $1 and get back $5,002 and have to face reporting and withholding.

[Jeff P]

Andy,

I understand what you are saying. And yes, in my opinion, your idea of scrapping the current 300-1 $600.00 requirement in favor of a (larger) net win requirement makes more sense to me.

Another thing that makes more sense to me would be to change the tax code so that reporting/withholding of gambling winnings for horse racing is made identical to gambling winnings that take place in a casino. And yes, I did get myself invited onto a conference call between the NTRA and their lobbyists and I did in fact make that suggestion (which apparently did not go anywhere.)

Please understand, it's not up to me (or HANA.) We are not the ones lobbying for the proposal as written.

The proposal as written comes from lobbying efforts paid for by the NTRA. I first became aware of the NTRA's lobbying efforts on this issue back in 2009. (So I know they've been at it for a good 5 years, maybe longer.)

When the NTRA reached out to me yesterday and asked me to lend HANA's support to the current proposal, it took me all of about 2 seconds to get behind them.

The proposal as written may not be ideal, but in my opinion it is definitely better than what we horseplayers face now. If there's an outside chance of getting it done - count me in.


-jp

.

[Longshot6977]

So this new proposal would basically do away with the need to make e.g. five $1 tri bets or 3 separate tickets for a $1 superfecta? ? We would just get a $5 tri ticket or one $3 ticket with our super? Am I reading this right?

[Jeff P]

Under this proposal:

1. Ticket Structure:
You would still be able to place any and all of your bets using the base wager amt of your choice so long as your base wager amt is at or above the min amt for that bet. For example, at a track offering $0.10 supers, you could bet in various increments of $0.10, $0.20, $0.30, $0.50, $1.00, $2.00, $5.00, etc. In other words, under this proposal there is no requirement that you the bettor change the way you do your current ticket structure.

2. Reporting:
What changes under this proposal is how winnings are reported. Currently, if you bet 1000 unique $0.10 superfecta combinations on a single horse and one of them is the winning combination and it pays $800.00, the IRS requires the track to issue a W2G because the total amount wagered per the tax code is the lone winning ten cent superfecta combo and $800.00 divided by ten cents is more than 300-1. (Despite the fact that the amt you bet was $100.00 and the amount you collect nets to just 7-1.)

Under the proposed new rules (using the above example) the full $100.00 that was bet would be used in the 300-1 reporting test. And because the amt collected and the amt bet nets out to 7-1, which is less than 300-1, a W2G form would not be issued.


-jp

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[highnote]

It is good to see the various industry entities working together for the common goal of changing the withholding tax requirements.

equibase sent me an email about this saying that "5 minutes could increase wagering by 1 billion dollars."

I presume equibase think handle will increase if there is less tax taken out of the winning wagers of horseplayers. So they want horseplayers to take 5 minutes to go online and support this position.

Hey... Haven't HANA been saying the same thing since their inception?

Less takeout will equal greater handle.

If racetrack management deny this fact then they are hypocrites.

[whodoyoulike]

Didn't Barry Meadow propose a similar solution on this web site a couple years ago?

People discussed how the current law is encouraging bettors to structure their bets to get around the withholding requirements i.e., causes them to devise ways to cheat the gov't etc. This topic and solution sure sounds familiar.

[Actor]

What are the chances of this approach bearing fruit?

http://www.bloodhorse.com/horse-racing/articles/85453/lawmakers-back-change-in-withholding-taxes

Should we all be signing the petition? Would any additional mobilization be useful?I don't get what the fuss is about. Gambling losses are tax deductible up to the amount of winnings. What matter how much they withhold? You get it back on April 15 if you keep good records and don't falsify your return.

[highnote]

I don't get what the fuss is about. Gambling losses are tax deductible up to the amount of winnings. What matter how much they withhold? You get it back on April 15 if you keep good records and don't falsify your return.


Let's say a player bets $2,000 on a pick 6 and wins $10,000. 30% of $10,000 is withheld by the IRS before the player gets a $7,000 payoff. However, let's say only one $2 ticket of the $2,000 that the player bet was a winning ticket. Even though the player had a net profit of $8,000, 30% is withheld from the gross return of $10,000 -- which is $600 more than would have been withheld if the tax was only withheld on the net return.

This means $600 was taken out of circulation for until a player gets a refund after the player's taxes are filed. If the player files for an extension for time to pay because of any number of reasons, the player might not get a refund until November. If the pick 6 was hit on January 1, 2014, this refund may not be received until November 2015 -- 23 months later!

So that $600 is unavailable for 23 months! Now imagine if the player's main bet is the pick 6, tens of thousands of dollars may be out of circulation.

[therussmeister]

I don't get what the fuss is about. Gambling losses are tax deductible up to the amount of winnings. What matter how much they withhold? You get it back on April 15 if you keep good records and don't falsify your return.
Apparently some bettors that specialize in pick 6s literally run out of money towards the end of the year and must sit out until they get their refund, even though they had a profitable year.

[Actor]

Let's say a player bets $2,000 on a pick 6 and wins $10,000. 30% of $10,000 is withheld by the IRS before the player gets a $7,000 payoff. However, let's say only one $2 ticket of the $2,000 that the player bet was a winning ticket. Even though the player had a net profit of $8,000, 30% is withheld from the gross return of $10,000 -- which is $600 more than would have been withheld if the tax was only withheld on the net return.

This means $600 was taken out of circulation for until a player gets a refund after the player's taxes are filed. If the player files for an extension for time to pay because of any number of reasons, the player might not get a refund until November. If the pick 6 was hit on January 1, 2014, this refund may not be received until November 2015 -- 23 months later!

So that $600 is unavailable for 23 months! Now imagine if the player's main bet is the pick 6, tens of thousands of dollars may be out of circulation.
I can see that this might be a problem for someone whose only income stream is the pick 6 but for myself I could offset this by arranging to have less withheld from my other income streams.

[highnote]

Track management wants money won from betting to be churned rather than sitting in the hands of the IRS. This makes sense.

One easy way to generate more churn is to lower the takeout tax. The effect is the same and would be felt by players on every winning wager -- not just when players hit the big score.

[ronsmac]

Whatever happened to the push to get the withholding thresholds raised? I haven't heard anything in months.

[infrontby1]

With any luck, there may be a response after the next president gets voted in.

[Stillriledup]

Track management wants money won from betting to be churned rather than sitting in the hands of the IRS. This makes sense.

One easy way to generate more churn is to lower the takeout tax. The effect is the same and would be felt by players on every winning wager -- not just when players hit the big score.

I think I would question 'track mgmt' wanting churn or even knowing what it is. A perfect example is a force out of a massive jackpot bet, tracks continually Make the closing day bet as hard as possible, that strategy prices out many people from having any shot and large payouts go into the pockets of the same people. If the carryover is massive and the track specifically cards small fields and obvious 'singles' not only will the handle be bigger but more 'churn money' falls into the hands of the average bettor.

[azeri98]

Wow I didn't know you guys were taxed on your winnings, I knew the lottery winnings were taxed but not racing. We don't get taxed up here on either.

[highnote]

Wow I didn't know you guys were taxed on your winnings, I knew the lottery winnings were taxed but not racing. We don't get taxed up here on either.


Worse still is that winners of large payouts are double-taxed.

The money that goes into the betting pools is reduced by takeout -- part of which goes to taxes.

Then, winners of bets that meet certain conditions (like jackpot payoffs) have taxes withheld.

[azeri98]

Worse still is that winners of large payouts are double-taxed.

The money that goes into the betting pools is reduced by takeout -- part of which goes to taxes.

Then, winners of bets that meet certain conditions (like jackpot payoffs) have taxes withheld.
That's insane.