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winnings are exempt from tax pursuant to section 3402(q)(5); (2)
petitioner was not legally required to sign the Form W-2G when he
received his slot machine winnings; (3) petitioner withdrew his
signature on the Form W-2G, thereby removing himself from its
legally binding terms; and (4) the Commissioner has no authority
to issue section 7.6041-1, Temporary Proced. & Admin. Regs., 42
Fed. Reg. 1471 (Jan. 7, 1977), as amended by 42 Fed. Reg. 33286
(June 30, 1977), requiring payers of slot machine winnings to
issue Forms W-2G to payees.
Respondent argues that winnings from slot machines are
includable in gross income and are, therefore, taxable. In
addition, respondent asserts that the Commissioner has the
authority to issue section 7.6041-1, Temporary Proced. & Admin.
Regs., supra, which requires payers of slot machine winnings to
issue Forms W-2G to payees. Respondent concludes that, although
section 3402 exempts slot machine winnings from withholding at
the source, such winnings are not exempt from taxation.
Petitioner's arguments are substantially identical to those
he advanced before this Court regarding the taxability of his
1989 and 1990 slot machine winnings. We found that petitioner
had slot machine winnings in 1989 and 1990 in the amounts of $1
million and $2,500, respectively. See Lyszkowski v.
Commissioner, T.C. Memo. 1995-235, on appeal (3d Cir., Sept. 5,
1995). In that case, we painstakingly addressed each of
petitioner's arguments before concluding that the slot machine
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