The Internal Revenue Service (IRS) has issued the Sports BettingFAX. The new software will allow bettors in all 50 states to place bets through sportsbooks. The decision marks a significant turning point in the tax-exempt bond business. The new tax structure allows UFA to deduct its direct costs from its income tax.
The new tax law, passed in 2021, does away with the widely outdated ban on the direct deposit of tax refunds and makes it more affordable for bettors to have access to their winnings through their sportsbooks. The new tax code requires that bettors use a debit card provided by the service, not their bank account, to pay their bets. The lack of banking fees means more money in their accounts. The IRS believes this measure will reduce the number of banks that provide debit card services to UFA and make it more difficult for non-profit groups to track their tax refunds.
UFA is also prohibited from sharing confidential information about UFA tax-payments with bookmakers. The new regulation was implemented to ensure that UFA bettors do not inadvertently pick up information from the bookmakers that will be used to defraud the tax authorities. The decision marks another victory for UFA, as many states are trying hard to prevent UFA groups from preying on innocent bettors looking to raise funds. The new law would allow UFA to continue its revenue-sharing program with bookmakers while implementing a system to make sure that no illegal activities take place.
According to UFA Executive Director Mike Dillard, the new ruling does not mean that UFA is planning to quit the tax-exempt bond business. “We still plan to be aggressive in our efforts to increase membership and to work with our tax attorneys,” he says. The new regulations, however, do mean that the Internal Revenue Service cannot be collecting money from UFA members until it implements a new system to track and audit the refunds of all participants. Until that time, UFA will continue to collect fees from bettors who fail to report their winnings and would-be members who fail to pay their federal tax liabilities.
The new policy, however, does not affect UFA’s current clients. Clients who already owe the IRS money will not necessarily have to pay this fee. Members who fail to remit all of their UFA income before the April 15th deadline will not have to pay this fee, either. As long as they meet the terms of the new tax code, they will not have to pay this fee. The revised code is set up so that people who do not meet the new standards will not have to pay the new tax.
While the new UFA guidelines are not without their problems, they represent a major victory for UFA and its members. The rules, which will most likely affect small states with only a few sportsbooks, will help protect bettors from the harassment many gamblers come across on a daily basis. Hopefully other states will follow suit, and this harassment will finally stop.