Audio By Carbonatix
Horse racing may be dying, but the horse track remains a uniquely fascinating place, with its mix of blue bloods and lowlifes united by a pursuit that cuts across all class lines: gambling. Even Lone Star Park in Grand Prairie, a venue that from the outside seems relatively staid, is party to its share of interesting happenings, like notorious cartel bosses who launder millions in drug proceeds while ascending the ranks of the American quarter-horse industry.
There are more mundane ways of breaking the law at a horse track, too. Like tax evasion. Take Willie Loveless, who was indicted by the Feds on Tuesday for allegedly concealing more than $1.76 million in gambling winnings from the IRS.
The indictment is something of a primer on where and how federal tax law and horse racing intersect. Horse tracks, the indictment explains, are required by federal law to issue an IRS Form W-2G whenever winnings exceed $600, provided the payout is at least 300 times the wager. Whenever a payout tops $5,000, the track automatically takes 25 percent off the top for taxes.
Gamblers, who are surprisingly unimaginative when it comes to coining slang, refer to winning tickets subject to taxes as “IRS tickets” and call the windows where they take them “IRS windows.”
They are more imaginative when it comes to keeping Uncle Sam’s grubby paws off their hard-earned gambling winnings, having developed something of a system. Regular gamblers hoping to avoid the mandatory taxes sometimes employ intermediaries to cash their tickets. By way of payment, these intermediaries typically charge about 10 percent of the ticket, which is why they are known in gambling circles as ten-percenters. The practice itself is called — wait for it — ten-percenting.
According to the indictment, Willie Loveless was one of the ten-percenters. Between 2008 and 2010, he signed 1,445 W2-G forms at Lone Star Park, claiming that the $1.76 million in tickets he was cashing were his. The Feds say they weren’t. It’s not clear from the indictment if Loveless ended up paying taxes based on the W2-G forms he filled out.
Loveless is charged with one count of obstructing the administration of IRS laws and 20 counts of making fraud and false statements to the IRS. The former carries a maximum fine of $5,000 and three years in prison. Each of the latter counts carries a possible fine of $100,000 and three years in prison.
All for pulling in nearly $60,000 per year. Good work if you can get away with it.
