As if we haven’t been through enough, tax season is upon us again. Even accountants wince a little at the thought of tax season. There’s no doubt that players club team members, hosts and slot attendants have a similar dread.
Every year there are guests who are unhappy about the tax-related information they received or didn’t receive from the casino. Dealing with these guests is often a no-win situation. Even when you’re right, you’re wrong. You have to use all your guest service skills to handle these situations.
To help in your efforts, some knowledge of the tax forms and issues can help explain things and help defuse the situation.
One of the biggest complaints from guests is that they don’t understand why they received a 1099 form and are certain that they didn’t win that much.
1099 forms must be mailed by no later than January 31st each year. Income reported on the 1099 form is a cumulative total for the calendar year. $600 is the cut-off point where reporting is required. The amount reported has nothing to do with jackpot wins, but the prizes won in contests and drawings. Casinos usually set a threshold of $50 to $100 where they log these transactions, so that they can determine who they are required to send a 1099 form to at the end of the year.
Handling these issues confidently and swiftly is key in getting the guest to a happier place.
To that end, it’s important that access to the details of dates, amounts and promotions that put them at $600 or more be readily available to team members in key guest contacts. A preventative step is to have a statement on your prize forms stating that “cumulative prize winnings of $600 or more in a calendar year will be reported to you and the IRS on form 1099.” If the guests see this throughout the year, then it shouldn’t be a shock to them when they receive the form in the mail.
Win/loss statements also cause guest concerns at this time of year.
Most casinos don’t automatically provide win/loss statements, and a few may not at all (my personal favorite). I have several issues with win/loss statements, similar to those guests who have issues with them. First, they are not consistent from casino to casino. Seeing information about their play in different formats can lead to confusion.
Second, some win/loss statements may show cash-in and out. Others may show coin-in. If coin-in is shown, that amount is usually five to 10 times more than the actual cash that the guest put into the machines. That can be shocking to them.
Third, the amounts on the win/loss statements can only report what happened while the guest had their players club card in the machine. If carded play runs between 40% and 60%, then on average, the statements are half-right.
Lastly, a win/loss statement is not acceptable documentation of gambling losses in the eyes of the IRS. I would avoid supplying win/loss statements to guests, but if you do, make sure that your key guest contact team members understand the statements and what the numbers represent, and that they also have knowledge of the items mentioned above.
Finally, let’s address form W-2G
Since guests receive these at the time of a jackpot win, there is usually less confusion surrounding them. Issues that guests have with these are usually one of two things.
Most common is that they can’t find their W-2G. They simply want someone to quickly reprint it.
Second, they received a letter from the IRS stating that the wins they reported on their tax return for last year don’t match what the casino reported to them. These letters usually arrive in August of each year. Casinos are required to submit detail files to the IRS each year listing every single W-2G they issued and the information in every field, including taxes withheld. The information in these files is what the IRS is matching against. The files are the only way that the IRS knows if a specific guest had taxes withheld.
Both of these issues are usually handled by having ready access to the guest’s jackpot history. Because reporting to the IRS is usually handled by the finance department, guest contact team members should be informed about who specifically to contact if they can’t quickly resolve the issue.
None of us is thrilled to see tax season coming again, but we can make it a little easier on everyone if we’re prepared. We can’t do anything about the tax-related reporting requirements, but we can do something about how quickly the issue is handled. After all, the level of service provided is what truly sets one casino apart from another. Educate your team and impress your guests.