Las Vegas – A Nevada union says a deal between casinos and the Internal Revenue Service to reduce reporting requirements for tip income doesn’t go far enough for casino workers given a bad economy.
The Culinary Union, representing roughly 60,000 service workers, says tips are down 50 percent as visitors spend less time and money in Las Vegas, making workers unhappy with IRS withholding requirements. The IRS has agreed with casinos to reduce the amount casino workers must declare as tip income by 20 percent.
Union officials say many workers intend to drop out of the voluntary program to withhold taxes from tips, choosing to risk the possibility of an audit.
„What the IRS has not done is fully understand the economy that’s going on here,“ said D. Taylor, secretary-treasurer for the union. „Our tip earners are getting whacked in a number of ways, and we don’t feel the tax rates reflect that.“
The program began less than two years ago. The IRS says 90 percent of tip-earning Nevada workers participate in the program.
A spokesman for MGM Mirage Inc., the largest private employer in Nevada and the largest casino operator on the Las Vegas Strip, disagreed with the union’s assessment and said the agreement was good for its employees.
„It’s not often that the letters I-R-S spell relief, but if you’re a tip-earning employee in this economy, that’s what they spell,“ MGM Mirage spokesman Gordon Absher said. „It’s our hope that this move will help tip-earning employees to better deal with the adverse economy we’re all suffering through.“
IRS officials are expected to participate in a seminar on Tuesday at the union’s hall, to teach members how to track their own tips. Workers leaving the program would hurt the IRS, which instituted the program in hopes of getting more of the billions of dollars of unreported tips nationwide each year.
Under the program, employers withhold taxes on estimated tips and the IRS promises not to audit participants.
Those who don’t participate are required to track their tips and report them on their income taxes.
Thousands of union members became angry with the IRS in 2006 when they were audited despite promises from the IRS about participating in the program.
„I don’t think it’s going to get better before it gets worse,“ Taylor said. „It is complicated to keep your own books, but we want to give all the tools to our members so they can make their own decisions.“