IRS Crackdown on Clubs in 2008 Produces Desired Effects


Since 2008, the IRS has tried to crackdown on taxing the amount of tips club employees receive. Recently, it obtained its frst conviction of a club employee, a host at the Pure nightclub at Caesars Palace named Richard Chu. Chu pleaded guilty of not declaring at least $112,000 in income, mostly tips in 2006. This conviction is the frst in the IRS raid on the club and its management offces in 2008. The raid was regarded by many as the warning from the feds for club employees to declare their tips.

The Pure management has put in place a regulatory compliance program, assisted by the Nevada Gaming Commission and includes participating in security seminars by state regulators and constant communication with casino security personnel outside the club.

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