IRS Set to Back Off on Poker Tournament Withholding Requirements

On September 2, I reported on a new IRS revenue procedure that would require poker tournament sponsors to withhold and report on payments of more than $5,000 made to winning payees in a tax year. This procedure would be effective for payments made on or after March 4, 2008.

But wait. This nightmare might not come to pass. Reports I’ve received tell me that the IRS is going to back off on the requirement that poker tournament sponsors must withhold 25 percent on tournament winnings.

I have no additional details, no official statements from the IRS, but I do have good sources. And while this isn’t a done deal yet, from what I’m hearing this withholding requirement won’t see the light of day.

Don’t go out and celebrate just yet. But it is good news.