Howard F. And Mildred E. Keogh v. Commissioner of Internal Revenue

In this case we review the tax court’s finding of income tax deficiencies against a Las Vegas casino employee. The wife of the employee is a party solely because the two filed a joint return. We affirm.

I. Facts.

Appellant husband here, petitioner in the tax court, was employed at the Dunes Hotel & Country Club, in Las Vegas. He worked in the casino, where he dealt blackjack or ran “big wheel” or roulette games and was known as a 21 dealer. The 21 dealers earned regular wages paid semimonthly. In addition, 21 players sometimes gave them tips or “tokes” in the form of coins or casino chips. Players often gave tokes to the dealers directly; at other times, they placed bets for the dealers, with a player determining after a winning bet how much of the winnings was the dealer’s to keep.

The tax court found that during the years in question, 1969-1971, all 21 dealers at the Dunes pooled their tokes, and that the pool was divided equally once a day among all the dealers who had worked during that day’s three shifts. Dealers who were off work sick for more than three days in a row were paid $20 off the top of the pool, but dealers who worked as temporary supervisors, or “floormen,”…