(1) The payor of a parimutuel payoff that is over $5,000 and 300 to one odds must withhold federal income tax on the total winnings payment at a 28% rate.

(2) Payments that are subject to withholding under the above rules are to be treated in the same manner as if they were wages paid by an employer to an employee.   Thus, the payor is liable for withholding the tax and paying it over to the federal government.