Wendell Olk v. United States

This is a suit to obtain a refund of federal income taxes. The issue is whether monies, called “tokes” in the relevant trade, received by the taxpayer, a craps dealer employed by Las Vegas casinos, constitute taxable income or gifts within the meaning of section 102(a), Int.Rev.Code of 1954. The taxpayer insists “tokes” are non-taxable gifts. If he is right, he is entitled to the refund for which this suit was brought. The trial court in a trial without a jury held that “tokes” were gifts. The Government appealed and we reverse and hold that “tokes” are taxable income.

I. The Facts.

There is no dispute about the basic facts which explain the setting in which “tokes” are paid and received. The district court’s finding with respect to such facts which we accept are, in part, as follows:

Additional findings of fact by the district court are that the taxpayer worked as a stickman and dealer and at all times was under the supervision of the boxman who in turn was supervised by the pit boss. Also the district court found that patrons sometimes give money to dealers, other players or mere spectators at the game, but that between 90-95% of the patrons give nothing to a dealer. No…