Facts
In 1971, the plaintiff was employed as a craps dealer in two Las Vegas casinos. Dealers would at times receive money from the players as "tokes," which are similar to tips. The major difference between tips and "tokes" is that the casino workers do not perform specific services for customers. In fact, their contracts prohibited any such services other than the task of running the various games. This money would be collected and split evenly among the four dealers at the craps table at the end of each shift. This particular plaintiff received an average of $30 per day combined from his two casino jobs.
The district court in this case made two “findings of fact” that were relevant to the Court of Appeals decision. The first was that the tips were the result of “impulsive generosity” on the part of the players, and the second is that the tips were the result of “detached and disinterested generosity.” These findings led the district court to find that the tips were gifts and not income for tax purposes under the test established in Commissioner v. Duberstein. This is relevant because gifts are not included in gross income for federal tax purposes.
Read more about this topic: Olk V. United States
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