Update: IRS and winnings over 5k
The IRS has recently clarified the issue regarding tournament wins and withholding.
According to the Las Vegas Sun, the IRS will not require casinos to withhold 25% of winnings over $5,000, but only require them to report those winnings on a W-2G form. The casinos would be expected to withhold tax themselves only in the event that winners decline to provide the information necessary to fill out the forms properly.
This should come as a big relief to players, who will still be required to pay proper taxes each year.
The IRS requirement goes into effect this coming March.
