Casinos and other sponsors of poker tournaments will be required to report winnings of more than $5,000 to the Internal Revenue Service beginning March 4, 2008, the tax agency said Friday.
Sponsors who meet the reporting requirement won’t need to withhold federal income tax at the end of a tournament, it said.
If a sponsor does not report winnings, it is responsible for withholding the taxes and sending the money to the IRS, normally 25% of the amount subject to reporting.
The IRS said poker tournament winners must provide their taxpayer identification number, usually a Social Security number, to the sponsor. If the winner fails to do so, the sponsor must withhold federal income at a rate of 28%.