Welcome home from NYRA

[philcski]

This is garbage. I got the letter today as well- Uncle Sam is already chasing me for 2005 and 2006 and I'm serious, I'll go to court before I pay taxes on ANY IRS reported wagers. The law is so arcane and unfair it's sickening. If you go to the casino and hit a slot machine for $9,999, nothing is reported. But if you go to the track and you hit a f*cking $600 tri (with money that hypothetically has already been income taxed) you get whacked by the IRS. Screw them, I'll go to jail for a couple days for the sake of horse players everywhere. They can make a f*cking example out of me.

[Bigsmc]

Originally Posted by blackthroatedwind

Actually, technically one could make the case that they are on the wrong side of the law if they aren't doing this.

They have our " consent " when we sign up for an account.

This does suck. It won't be long before all ADW's are doing it.

I'm sure when the "law" was written, the minimum bet was $2, this is catching up to the relatively new (at least to the Government) $1 wager.

Wait'll they start banging the .10 Supers. Every time you hit for $30.20, wham, W2G. There'll be a run on the forms. I'd like to have stock in the printing company.

[justindew]

I'm not sure this is relevant, but I was a mutuel clerk in college, and we were SUPPOSED to ask everyone who ever cashed a ticket "Do you have any identical tickets to cash?" But we never did, and the track knew we never did, and they didn't really care.

[Rudeboyelvis]

Originally Posted by Bigsmc

Wait'll they start banging the .10 Supers. Every time you hit for $30.20, wham, W2G. There'll be a run on the forms. I'd like to have stock in the printing company.

I'm sure I'm missing something glaringly obvious, but how? The intent I interpreted from the letter is that derivative of the bet is insignifigant unless played multiple times, resulting in a win of 600.00, minus the cost of the initial play, right?

In this case, the end result is 30.20, they can't assume that it was a fractionalized 2.00 bet, unless it was bet for a dime 20 times on twenty separate tickets..... Can they???!!!

I seriously didn't read it that way.

[blackthroatedwind]

Originally Posted by justindew

I'm not sure this is relevant, but I was a mutuel clerk in college, and we were SUPPOSED to ask everyone who ever cashed a ticket "Do you have any identical tickets to cash?" But we never did, and the track knew we never did, and they didn't really care.

It's exactly relevant. The letter of the law says that it is, in fact, the aggregate that matters, and technically if one has multiple tickets they need to be cashed and bunched together. However, tracks have looked the other way. For some reason, that hasn't been explained yet, NYRA is now batching these bets.

I don't care about the new signers it will generate, but when I end up with withholding because of the batching, which will certainly happen, I am going to be pissed. However, it's only an immediate inconvenience.

The reality is that this further underscores the necessity to raise the withholding threshhold......something the NTRA should have made a priority, and achieved, years ago.

[justindew]

Originally Posted by blackthroatedwind

......something the NTRA should have made a priority, and achieved, years ago.

To repeat from an earlier post of mine, I still can't say I understand the role of the NTRA in this sport.

[blackthroatedwind]

Originally Posted by justindew

To repeat from an earlier post of mine, I still can't say I understand the role of the NTRA in this sport.

This is exactly the kind of thing they should have handled. When it became essential to change tax laws in order for Canadian tracks to co-mingle they managed to get that done quickly. But, of course, that had a great benefit to racetracks and the withholding has a more obvious effect on horseplayers only so they dropped the ball. They are too busy ( or were ) pretending to attract new fans, so those people could possibly get screwed down the road, to care about the true existing fans. Of course, as withholding takes money out of circulation, in essense racetracks get screwed as well. Just not as severly as horseplayers.

[Bigsmc]

Originally Posted by Rudeboyelvis

I'm sure I'm missing something glaringly obvious, but how? The intent I interpreted from the letter is that derivative of the bet is insignifigant unless played multiple times, resulting in a win of 600.00, minus the cost of the initial play, right?

In this case, the end result is 30.20, they can't assume that it was a fractionalized 2.00 bet, unless it was bet for a dime 20 times on twenty separate tickets..... Can they???!!!

I seriously didn't read it that way.

It was a bad attempt at humor RBE. I should've stopped the post before that.

[Rudeboyelvis]

Originally Posted by Bigsmc

It was a bad attempt at humor RBE. I should've stopped the post before that.

I figured that after I posted ... Should have learned not to post replies before the morning coffee kicks in

Didn't know you were in New Port Raunchy - We may be neighbors....

[skippy3481]

Phil, where are you gambling at a casino where they take take out taxes on any hit over $1199. The way to get around paying the federal taxes is to just show losses up to your winnings. Recycled money is a wonderful thing.

[southerndutch]

Shouldn't this "batching" go both ways. If you laid out $2400 in pick-6 combinations and you hit it for $3000 shouldn't you only be taxed on your winnings,$600. Could this possibly be interpreted this way?

[SniperSB23]

Originally Posted by southerndutch

Shouldn't this "batching" go both ways. If you laid out $2400 in pick-6 combinations and you hit it for $3000 shouldn't you only be taxed on your winnings,$600. Could this possibly be interpreted this way?

No, it is clearly definied that you can't interpret it that way.

[blackthroatedwind]

Originally Posted by SniperSB23

No, it is clearly definied that you can't interpret it that way.

But, he's partially right........it should be.

[philcski]

Originally Posted by skippy3481

Phil, where are you gambling at a casino where they take take out taxes on any hit over $1199. The way to get around paying the federal taxes is to just show losses up to your winnings. Recycled money is a wonderful thing.

Casinos don't take taxes out. They present you with a W2G if you win more than $2,000, and a IRS Form 8300 if you move more than $10,000 at one time.

It isn't as simple as you state if you have a significant number of IRS transactions- the income/writeoff raises an audit red flag, and on top of that the writeoff isn't a straight one for one as your AGI goes up with each additional reporting; therefore you move into a new tax bracket even if you write off the entire amount. It's all a crock of f*cking bullshit which they implemented back in the '50's or so to defense against money laundering at the track.

[SniperSB23]

Originally Posted by blackthroatedwind

But, he's partially right........it should be.

Absolutely. Unfortunately trying to interpret it that way isn't going to work as they are pretty clear about that sort of situation.

[Holland Hacker]

Originally Posted by docicu3

On the subject of NYRA reporting IRS information above and beyond the norm....

Does it not make sense that....

2) Ask the lawyers among us if this new stance from NYRA does in fact break the law as it is not the business of NYRA to feel as if they can provide this info without our consent.

It is likely that NYRA is doing this to be on the good side of the Federal Government (IRS) as they in fact are very influential in setting the rules of business which seem to literally change monthly.

I'm NOT a lawyer but I am a CPA that works in the field of Tax. After reading the letter last night I decided to do a little research into the history and justification of the withholding requirements. (YAWN) I do not know why as I have never had a signer, I came close last week at Belmont but still have yet to make that big score. Hopefully Saturday, Go Digger! Anyway if your inclined to know the history for the multipe wagers vs. single wagers below is a brief history.

Nearly 20 years ago there was a Private Letter Ruling ("PLR") issued by the IRS in response to someone asking whether a three horse exacta box was one bet or six bets for purposes of computing the amount to be reported withheld. If you're so inclined to read look for it or read it is PLR7823066.

The PLR states "the derivation of the rule in the Instructions for Form W-2G and 5754 that multiple wagers shall be considered as seprate debts is the Conference Report as Filed by the Conference Committee on Septemner 13, 1976 on Public Law 94-455 (Tax Reform Act of 1976), which reads as follows:

"Under the conference agreement, it is intended that therm 'wagering pool' is to include all paimutueal betting pools, including on and off track racing pools, and similar types of betting pools."

The PLR goes on to say "The conference agreement also makes it clear that withholding applies to winnings net of the ticket price taking into account all tickets for identical wagers. For example if one $100 bet and two $50 bets are placed on a single horse to win a single race track event, any winnings from the three tickets should be added together and the ticket prices of all three tickets should be deducted to determine net winnings. However, if the bets are placed on different horses or on different events, the net winnings are to be determined separately for each ticket."

I knew that these rules were antiquated but I didn't realize that they were drafted long before the advent of most of the exotic wagers of today. It is absurd that these rules would still be applicable to pick 3s, pick 4s, pick 6s as well as fectas both Tri and Super that are a significant amount of the wagering base in the US today.

In summary the current tax treatment is based on a conference committee report from the enactment of the 1976 Tax Reform Act and not any enacted tax legislation. That doesn't mean that it is "bad" law for NYRA or any other tracks or wagering service to be following.

[SniperSB23]

Originally Posted by Holland Hacker

I'm NOT a lawyer but I am a CPA that works in the field of Tax. After reading the letter last night I decided to do a little research into the history and justification of the withholding requirements. (YAWN) I do not know why as I have never had a signer, I came close last week at Belmont but still have yet to make that big score. Hopefully Saturday, Go Digger! Anyway if your inclined to know the history for the multipe wagers vs. single wagers below is a brief history.

Nearly 20 years ago there was a Private Letter Ruling ("PLR") issued by the IRS in response to someone asking whether a three horse exacta box was one bet or six bets for purposes of computing the amount to be reported withheld. If you're so inclined to read look for it or read it is PLR7823066.

The PLR states "the derivation of the rule in the Instructions for Form W-2G and 5754 that multiple wagers shall be considered as seprate debts is the Conference Report as Filed by the Conference Committee on Septemner 13, 1976 on Public Law 94-455 (Tax Reform Act of 1976), which reads as follows:

"Under the conference agreement, it is intended that therm 'wagering pool' is to include all paimutueal betting pools, including on and off track racing pools, and similar types of betting pools."

The PLR goes on to say "The conference agreement also makes it clear that withholding applies to winnings net of the ticket price taking into account all tickets for identical wagers. For example if one $100 bet and two $50 bets are placed on a single horse to win a single race track event, any winnings from the three tickets should be added together and the ticket prices of all three tickets should be deducted to determine net winnings. However, if the bets are placed on different horses or on different events, the net winnings are to be determined separately for each ticket."

I knew that these rules were antiquated but I didn't realize that they were drafted long before the advent of most of the exotic wagers of today. It is absurd that these rules would still be applicable to pick 3s, pick 4s, pick 6s as well as fectas both Tri and Super that are a significant amount of the wagering base in the US today.

In summary the current tax treatment is based on a conference committee report from the enactment of the 1976 Tax Reform Act and not any enacted tax legislation. That doesn't mean that it is "bad" law for NYRA or any other tracks or wagering service to be following.

Pick up a copy of Steven Crist's Exotic Betting. There is a whoile chapter devoted to the issue.

It also goes into detail on estimates as to how much handle tracks are losing each year because of the withholdings.

[skippy3481]

Phil,
I'm not a tax attorney or cpa but i have a good amount of experience dealing with this. It is 1199 not 2000, for the w2g and state taxes are automatically deducted(for which you cannot claim a loss against) Which makes it confusing if you have multiple signers from multiple states, having to file in every state. You then have the option of allowing the casion to take out the withholding tax. Your right it does raise an audit flag, but so do other things and if your winning enough money for it to raise a flag, then its a good thing not a bad thing. Audits aren't that bad(minus the time consuming numbing bull **** that the irs puts you) through and as long as your on the up and up youll be fine. As far as the adjusted income, your right and thats completely crap. I dont agree with the IRS at all on a many gambling propositions and how they tax it. In my view, they shouldn't tax it at all as the money has already been taxed once.

[NoLuvForPletch]

Will this be uniform everywhere? Will my NYC OTB phone account start doing the same thing? Will my NJ Bets account also begin to do the same thing? Are the other sites like express bet and you bet handling this the same way now or is this strictly a NYRA thing? Betting at the windows are going to be a blast on Saturday if that is the only way to avoid this nonsense.

[10 pnt move up]

well if the others are not doing it wont NYRA One be screaming bloody murder? If they are the only ones doing this then they are at a severe disadvantage. Can NY residents use Bris/youbet?