Washington, D.C. (November 12, 2026) – The American Institute of CPAs (AICPA) has asked the Department of the Treasury and the Internal Revenue Service (IRS) to provide guidance on the session method for substantiating wagering gains and losses. The AICPA submitted comments highlighting unresolved issues in proposed regulations that could affect taxpayers.
While Treasury and the IRS have issued proposed regulations (REG-113229-25) addressing Section 165(d) and the rules governing Form W-2G, the proposed regulations do not address how taxpayers should measure, substantiate and report wagering gains and losses. Addressing these issues would improve administrability and reduce uncertainty for taxpayers.
The AICPA recommends that Treasury and the IRS issue guidance addressing the following:
Define a gambling session for purposes of measuring wagering gains and losses and provide a corresponding safe harbor.
Identify which records constitute adequate substantiation of wagering gains and losses under the session method, and confirm that account histories, win-loss statements, player activity summaries and similar records that gaming operators furnish to patrons may be relied on for that purpose.
Apply the session method to multiple types of wagering, including table games, horse racing, electronic gaming or other types of wagers.
“The AICPA is asking Treasury and the IRS to establish a consistent session-based approach that better reflects taxpayers’ economic gains and losses, clarify what records can substantiate those results and apply the approach across different types of wagering,” said Scott Klein, Senior Manager, AICPA Tax Policy & Advocacy. “The growth of online and mobile wagering and the new 90% limitation wagering losses have made clear, practical rules for reporting gambling gains and losses more important than ever. Without clear rules, taxpayers can face higher taxable income, reporting discrepancies and uncertainty over how to substantiate their activity.”
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education, and consulting. A founding member of the Association of International Certified Professional Accountants, the AICPA sets ethical standards for the profession, attestation standards, and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state, and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, partners across the profession to build future talent, and drives continuing education to advance the vitality, relevance, and quality of the profession.
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Contact: Veronica L. Vera
202-434-9215
Veronica.Vera@aicpa-cima.com