Brief: Nevada looking at lump-sum payments

Monday, Nov. 23, 1998 | 2:29 a.m.

The decision came as industry officials are gearing up to ask regulators for an official rule change to bring state regulations in line with a new federal law.

That law, passed in October, removed tax penalties for jackpot winners who are offered a choice of discounted lump-sum or long term payments.

In the past, winners offered a choice of receiving their jackpots in a lump sum or over a period of several years were deemed by the Internal Revenue Service to have effective control of the money at the time they won the jackpot.

Under the IRS rules, known as the doctrine of constructive receipt, any winner given a choice of payment terms had no choice but to pay all of the taxes on the jackpot immediately, even if they did not receive all the money for 30 years.

Gaming companies like IGT dealt with that rule by giving winners no choice. Everybody got the term option.

The new federal law does away with the doctrine of constructive receipt. But state regulations still ban the practice.

IGT attorneys said they plan to offer a formal request for a rule change soon, and hope it would be adopted by February. Commission Chairman Bill Curran said the panel would likely want to hold at least two workshop sessions to discuss the rules changes.