IRS Criminal Tax Investigations Targeting Casinos: What Executives and Gamblers in New Jersey Need to Know

Casinos are prime targets for the Internal Revenue Service (IRS). Not only can the IRS often reap substantial rewards from exposing improper accounting practices and other means of corporate tax evasion and tax fraud within casinos, but it can use its investigative powers to obtain information from casinos about gamblers who may have underpaid their federal income taxes as well. Learn more from New Jersey tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group:

IRS Investigations Targeting Criminal Charges Against Casinos (and Their Owners and Executives)

Like other businesses, the IRS targets casinos for all types of federal tax-related violations. This includes not only the underreporting and underpayment of corporate income tax, but violations involving payroll tax and other federal tax obligations as well.

When targeting casinos and other businesses, the IRS will often also scrutinize individual owners’ and executives’ tax-related activities. This includes both: (i) their involvement in any alleged corporate tax fraud or tax evasion; and, (ii) their efforts to minimize their own personal federal tax liability.

If the IRS chooses to launch a criminal tax investigation as opposed to an ordinary tax audit, this can increase the stakes significantly. While tax audits can expose individual and corporate taxpayers to liability for back taxes, interest, and civil penalties, criminal investigations can lead to substantial fines and prison time (for the individuals involved).

IRS Investigations Targeting Criminal Charges Against Casino Gamblers

Along with targeting casinos (and their owners and executives), the IRS also uses its investigative powers to target gamblers. Under federal law, gamblers must report and pay taxes on their gambling winnings—and, beginning in 2026, only 90 percent of gambling losses will be deductible (unless Congress amends the Big Beautiful Bill before the end of the year). With this change, we expect to see the IRS prioritize enforcement actions targeting gamblers even more so than we have in the past.

Just like casino owners and executives, gamblers who are accused of intentionally attempting to evade their federal income tax liability can face serious federal charges. Some examples of charges (and penalties) that can result from IRS criminal tax investigations include:

• Tax Evasion (26 U.S.C. Section 7201) – Up to a $100,000 fine ($500,000 for corporations) and five years of federal imprisonment.
• Failure to File a Return or Pay Tax (26 U.S.C. Section 7203) – Up to a $25,000 fine ($100,000 for corporations) and one year of federal imprisonment.
• Tax Fraud and False Statements (26 U.S.C. Section 7206) – Up to a $100,000 fine ($500,000 for corporations) and three years of federal imprisonment.

With these risks in mind, experienced legal representation is essential. If the IRS is targeting you or your business in a criminal tax investigation, you should consult with experienced tax counsel as soon as possible.

Schedule a Confidential Consultation with New Jersey Tax Attorney Kevin E. Thorn

Kevin E. Thorn, Managing Partner of Thorn Law Group, is an experienced New Jersey tax attorney who represents corporate and individual clients during high-stakes IRS criminal tax investigations. If you would like to schedule a confidential consultation with Mr. Thorn, please call 201-842-7696 or contact us online today.