Trevor Sikes, “Gambling Loss Haircut Lambasted at IRS Hearing” (Tax Notes, July 20, 2026):

The One Big Beautiful Bill Act’s 90 percent limitation on gambling loss deductions is grossly unfair to honest gamblers and should be repealed, according to stakeholders.

Speakers took the opportunity at a July 17 IRS hearing on proposed regulations on gambling losses, expenses, and reporting obligations to warn that the OBBBA’s creation of taxable phantom income would also push taxpayers to gamble illegally and reduce revenue. The stakeholders urged Treasury and the IRS to relay their concerns to Congress and advocate for remedial legislation.

The proposed rules (REG-113229-25), issued April 16, would incorporate the OBBBA’s gambling loss haircut and new ​information reporting thresholds, and update regulations under sections 165, 3406, 6041, and 6041A.

The OBBBA expanded on gambling tax changes from the Tax Cuts and Jobs Act by making the limits on deductions in section 165(d) permanent and adding a 90 percent limitation.

Before the TCJA, professional gamblers could fully deduct their wagering business expenses, while amateurs were limited to deducting gambling losses to the extent of gambling gains.