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Temporary Income Tax Regs., 42 Fed. Reg. 1471 (Jan. 7, 1977).
This latter return must be made on a Form W-2G. See sec. 7.6041-
1(c), Temporary Income Tax Regs., supra; see also sec.
31.3402(q)-1(f), Employment Tax Regs. (Form W-2G payer reporting
requirements for purposes of withholding). In determining the
amount won from such games, the amount wagered is deducted from
the winnings in a keno game, but is not deducted in a bingo game
or slot machine play. See sec. 7.6041-1(b)(1), (2), Temporary
Income Tax Regs., supra. Winnings from more than one game are
not aggregated. See sec. 7.6041-1(b)(5), Temporary Income Tax
Regs.
Legislation enacted in 1917 added informational reporting
requirements to the Internal Revenue Code similar to the current
provisions under section 6041. See Act of October 3, 1917, ch.
63, tit. XII, sec. 1211, 40 Stat. 300. The Senate report
accompanying this legislation stated:
That the provisions of the law requiring withholding at
the source of the tax due on profits or incomes of
resident taxable persons be repealed and instead there
be substituted “information at the source,” where the
amount of income received in any taxable year and paid
over to the taxable person exceeds $800 for any taxable
year. * * * The proposed amendment is conducive to a
more effective administration of the law in that it
will enable the Government to locate more effectively
all individuals subject to the income tax and to
determine more accurately their tax liability. This is
of prime importance from a viewpoint of collections.
In addition to this very important consideration, the
changes will result in the saving of annoyance and
expense to taxpayers and withholding agents in
lessening of expense to the Government, and in
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