The IRS theoretically get to learn of all slot wins over the 'applicable' limits.

You can offset losses against wins....

How do you prove your losses?
How do they prove your wins under the limit?

I presume the whole thing is a 'scam' .. The IRS uses any reason possible to collect tax but they have to set a 'limit' else its impossible to enforce it properly?

When I was investigated - part of the reason was that I had introduced 'capital' that I could not account for. I said I had won it at the Barracuda Club (I had actually won a lot of it there). They made me sign a form consenting them to contact the casino and verify. I dont know if they ever did contact them, or if they got a reply, but they eventually told me they were happy with the explanation.

Ignoring any paperwork I may have to complete anyway, and any loss limits etc.. If I gambled at the Palms and won or lost $50,000 - could this be verified later?....Remember, in the UK, if they do not know your name (would only happen if you were a guest) then they will ask for it (or even your ID) when you buy-in.