Poker players, tax professionals, lobbyists, and hobby gamblers appeared at an IRS public hearing on Friday to speak out against a gambling tax change, with every speaker who attended calling for the rule to be reconsidered, postponed, or clarified, according to PokerNews, which attended the hearing remotely.
Of the dozen individuals scheduled to speak, ten appeared at the hearing, and all opposed the tax change. U.S. Rep. Dina Titus, a Democratic congresswoman from Nevada, argued that the change taxes phantom income, is inconsistent with sound tax policy, and unfairly burdens both professional gamblers and casual players. Poker author and journalist Sara O’Connor said the new tax law punishes volume and honesty, and argued that it creates incentives for poker players and other gamblers not to report gambling income — adding that phantom gambling income is not true income, according to PokerNews.
Todd Witteles, founder of Poker Fraud Alert, called on the IRS to postpone implementation of the tax change to allow more time to study its consequences and to permit repeal efforts to continue. Witteles also raised the question of whether professional poker players can fully deduct business expenses, rake, and buy-ins, arguing that business expenses should not be subject to any 90% limit because they are expenses rather than losses. Joshua Thatcher, better known as PLO Professor, said the change would have an overall negative impact across various gambling industries, according to PokerNews.
Other speakers at the hearing included Mike Vanaki of the American Gaming Association, Gary Kondler of gambling tax firm Kondler & Associates, and James Cloutier, identified by PokerNews as a poker player and recent RunGood Poker Series Pennsylvania winner. Longtime poker professional and commentator Katie Stone also spoke, telling the hearing that she and her family moved out of the United States in 2011 following Black Friday, according to PokerNews.
The IRS has no authority to repeal the gambling tax change and is responsible only for implementing it, according to PokerNews — meaning any effort to undo the rule would need to proceed through Congress rather than the agency that hosted Friday’s hearing.
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