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I work for a Native American Casino in Arizona. Recently, the employees
signed an agreement that enters us into a GITCA (gaming industry Tip
Compliance Agreement) with the IRS. (We have been told). This is common in
the industry for casino games dealers.
I know a number of dealers who have previously been involved with these
agreements in other casinos across the country. Those people say that
there was ALWAYS an IRS agent present to explain the agreement( which gives
those who participate, retroactive amnesty, if audited, for the TIP income
portion reported on previous and future tax returns).
The strange thing about our situation is that we never saw or spoke to an
IRS agent( the employees), and the "agreement" we signed, is not the same
agreement I have seen from the IRS documents I have downloaded from the
internet, it is a shortened version, with less specific verbiage.
The function of the agreement is to get persons working in a Tipped income
industry to report more of their income. A "rate" is usually agreed to
by both parties involved.( the casino employees and the IRS) The industry
standard is anywhere from $6- $10/hr. (This is the amount most dealers have
been claiming anyway in our establishment) this rate is added and then
multiplied
by hours worked, and taxed accordingly at the end of the pay period.
The IRS in turns allows the amnesty to those who comply with the agreed upon
rate.
We have been told (by the company) that the IRS would agree to no less than
100% reporting of Tips, this "forced" the casino to "black box" the dealers.
Needless to say this has dramatically affected our daily take home pay, as
now 40% of what we make is withheld from our Tips on a daily basis for tax
purposes.
Now, I don't mind paying my fair share of the tax burden, but I am wondering
if in fact there is anyway to find out for sure whether there is in fact an
agreement between the IRS and our establishment, and why it is not similar
to virtually every other casinos agreement that has one.
If not, then I wonder what kind of action "we" may be able to take against
the casino, if they in fact promised us amnesty( as explained above) and we
actually do not have it. I know that until we have actually suffered a loss
it may not be relevant. BUT... the new method instituted by the casino (
because of the IRS they say) has affected many people already, they are
unable to live on the daily take home pay (which is now about 1/2 after a
forced 10% tip out to the floorpeople from each dealer, another issue).
Paychecks, after taxes, health and 401 k contributions are negligible at
best.
It has been speculated that the "agreement" we have signed is "not worth the
paper it is written on" and is merely a way to get the workers to report
100% of their tips "because if I have to pay on 100%, then so do they".
Again, I understand that we should, BUT, if the IRS has been represented,
but is actually not involved, what kind of repercussion could the casino
face?
The second issue:
At the end of a shift, we are required to take our "toke box" to the cage.
The box is emptied and counted; at that point 10% to a maximum of $15 is
removed and placed in a tip pool to be distributed among the floor
personnel.
40 % is then withheld and we walk with the remaining amount in cash. This
is all recorded for payroll in the computer system.
The question here is that many believe that forcing the dealers to "tip"(
they don't have a choice on the 10% to $15) violates US statutory employment
laws, as well as Arizona state law where both state in some manner...an
employer may not forcibly remove monies from an employee as a condition of
employment. I know for a fact that Canterbury Park in Minnesota used the
same type of system we use now, it was questioned by the state and they were
forced to eliminate that policy.
The question here is, since this is a Native American Casino and on a
reservation, how much does that protect them?
Who would be the person(s) to contact regarding this on both a state and
federal level?
Needless to say this is a very, very volatile situation within our
organization, thus the contact information is vague at best, and the email
address won't reach me.
Please respond only within this forum.
Thank you
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