Rev. Rul. 87-82

1987-2 C.B. 269, 1987-34 I.R.B. 5.

INFORMATION REPORTING; NEVADA CASINOS

Published: August 24, 1987

SECTION 6050I. - RETURNS RELATING TO CASH RECEIVED IN TRADE OR BUSINESS, 26 CFR 1.6050I-1: Returns relating to cash in excess of $10,000 received in a trade or business.

  Information reporting; Nevada casinos. Gambling casinos in the State of Nevada that have been granted an exemption from the Treasury reporting requirements under 31 CFR section 103 are also exempt from the reporting requirements of section 6050I of the Code for cash transactions in excess of $10,000.

ISSUE

  Are Nevada gambling casinos that have been granted an exemption under 31 C.F.R. section 103.45(c) (1986) from the Treasury Department recordkeeping and reporting requirements under 31 C.F.R. section 103 subject to the reporting requirements of section 6050I of the Internal Revenue Code?

LAW AND ANALYSIS

  Section 6050I(a) of the Code provides that any person (1) who is engaged in a trade or business, and (2) who, in the course of the trade or business, receives more than $10,000 in cash in one transaction (or two or more related transactions) must make an information return at such time as the Secretary may prescribe by regulations. Section 6050I(b) provides that the return must be in such form and contain such information as the Secretary may prescribe.

  Section 6050I(c) of the Code provides certain exceptions to the reporting requirements of section 6050I(a) for cash received by financial institutions. Section 6050I(c)(1)(A) provides that section 6050I(a) shall not apply to cash received in a transaction reported under title 31, United States Code, if the Secretary determines that reporting under this section would duplicate the reporting to the Treasury under title 31.

  Section 1.6050I-1(d)(2)(ii) of the Income Tax Regulations provides that under the authority of section 6050I(c)(1)(A) of the Code the Secretary may exempt from the reporting requirements of section 6050I casinos with gross annual gaming revenue in excess of $1,000,000 that are exempt under 31 C.F.R. section 103.45(c) from reporting certain cash transactions to the Treasury Department under 31 C.F.R. sections 103.22(a)(2) and 103.25. The determination as to whether a casino that is granted an exemption under 31 C.F.R. section 103.45(c) will be required to report under section 6050I will be made on a case by case basis concurrently with the granting of the exemption.

HOLDING

  The Commissioner has determined that gambling casinos in the State of Nevada that have been granted an exemption under 31 C.F.R. section 103.45(c) from the Treasury Department reporting and record- keeping requirements of 31 C.F.R. sections 103.22(a)(2), 103.25(a) and 103.36 also satisfy the standard for exemption from the reporting requirements of section 6050I of the Code for cash transactions in excess of $10,000. This exemption from section 6050I reporting applies only to casinos with gross annual gaming revenue in excess of $1,000,000. The Commissioner may withdraw the exemption should that state's reporting system subsequently fail to satisfy the reporting requirements of section 6050I.

  Nevada casinos with gross annual income of $1,000,000 or less are subject to the reporting requirements of section 6050I of the Code. In addition, non-gambling businesses at casino hotels and resorts, such as shops, restaurants, and hotels, are separate trades and businesses from casinos operations and must report under section 6050I.

Rev. Rul. 87-82, 1987-2 C.B. 269, 1987-34 I.R.B. 5