Agents won't be allowed to challenge whether casino comps to high-rolling patrons qualify for treatment as promotional expenses, according to a memo released by the Large and Mid-Size Business Division of the Internal Revenue Service.

According to the memo, section 274 of the tax code sets limits on the deductibility of meals and entertainment expenses, though an exception does exist for goods, services and facilities made available to the general public for promotional purposes. Casinos have usually marketed their comp programs in such a way that the costs are treated as promotional expenses -- being given to gamblers based on a casino's expected win calculated from the gambler's prior activity. Most regular patrons participate in casinos' favored customer programs, commonly called slot clubs.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access