IRS Rules for Poker Tournaments

Not long ago the IRS turned down a proposed regulation that would have them collecting an automatic 25% from any poker player in the US that won a live poker tournament with a prize of $5,000 or more, citing the difficulty in enforcing the rule. Now they have come out with a set of rules on poker tournaments that seem to be inspired by the prior bit of legislation. The new law will require tournament sponsors to report tournament winnings of more than $5,000, but not collect the actual taxes. The new requirement goes into effect in early March of next year.