Nevada State Journal from Reno, Nevada • 1

Judge Rules IRS Appeal Expected In Las Vegas Decision From Journal Wire Services LAS VEGAS The Internal Revenue Service was dealt a substantial setback here Thursday when a federal judge ruled the "tokes" or tips given casino dealers are gifts and not taxable income. U.S. Dist. Court Judge Thomas J. Clary, a visiting senior court judge from Pennsylvania, ruled dealers do not "furnish a personal service" to gamblers and thus their tips are not taxable.

Gerald F. Swanson, district director of the IRS for Nevada, said the decision "in all probability" would be appealed. He said there are between 8,000 and 9,000 casino dealers in the state who pay between $10 million and $15 million in income taxes on tips each year. The ruling came in a civil suit filed by Wendell Olk, a former casino dealer, who sued the IRS for the $792 he paid in taxes on tips for 1971. Olk had argued in the suit that tips received by casino dealers were not for service performed but rather a gift.

According to briefs, Olk did not report as income in 1971 some $5,775 in tokes he received as a crap dealer at the Horseshoe and Sahara hotels in Las Vegas. The IRS subsequently assessed him more than $700 in taxes on the alleged income. Olk paid the IRS demands and then filed suit. The judge's ruling was greeted Final American, New York Stocks enthusiastically by casino employes here. "Everyone thinks it's terrific," said one dealer at Caesars Palace where word of the decision had reached dealers within minutes.

"I'm sure it will be appealed, but it is a start. 1 It gives us a chance." A dealer at the Riviera Hotel, saying he thought the decision was a "good deal," expressed concern for the possibility of increased income taxes to make up for the money that may be lost from the dealers. "I can see their point of view, they have to have the money to run the government," he said. "But I can see my point of view too." "We earn our money by getting our pay," said "declared" the dealer, who admitted about $7,000 in tips last year. He said the tokes come when a gambler is winning and "feeling a little good.

They tip to bring themselves luck." Judge Clary, in his decision, noted that dealers must treat all players equally as a condition of their employment and "any attempt to provide special service to a patron is grounds for termination." "The dealer functions in an almost machine like manner and performs no service which the court feels is compensable by patrons by means of the traditional tip," the judge said. Swanson, meanwhile, said the IRS would "look at the court decision and decide whether we will appeal. In the interim, we are advising tip earners to continue recording and reporting their tips." He said the IRS would deny any claims for refunds on taxes paid on tip income until the appeal has been decided. Morning Capsules Woman Nominated to Cabinet WASHINGTON (AP) President Ford chose a woman for his Cabinet on Thursday, nominating Carla Anderson Hills, 41, to be secretary of housing and urban development. She would become only the third woman Cabinet member in history.

Mrs. Hills, a Republican, has been assistant attorney general in charge of the civil division at the Department of Justice since April 1974. The only previous women members of the Cabinet were Frances Perkins, secretary of labor in the Franklin D. Roosevelt Cabinet in 1933-45, and Oveta Culp Hobby, secretary of welfare in the Dwight D. Eisenhower Cabinet in 1953-55.

The nomination ran into immediate opposition from Sen. William Proxmire, D- chairman of the Senate Banking, Housing and Urban CARLA ANDERSON HILLS Affairs Committee. happy nominee Judge Slain, Sheriff Wounded LOUISA, Va. (AP) A Louisa County judge was shot to death and the county sheriff wounded Thursday when a gunman invaded the county courtroom and opened fire with a -off shotgun. Two and a half hours later, swarms of sheriff's deputies and state policemen flushed a wounded suspect from heavy woods three miles away after an exchange of gunfire and took him into custody.

Slain in his courtroom was General District Court Judge S.A. Cunningham, 66, who was presiding over a case when he was shot in the head by a gunman who fired from an open door. Police said the gunman then walked down the hall, poked the 12-gauge pump shotgun into the door of the clerk's office, and shot Sheriff Henry A. Kennon in the arm. Kennon was not seriously injured.

Food Stamp Prices Stay Same WASHINGTON (UPI) President Ford announced Thursday he will allow a bill freezing food stamp prices to become law without his signature, conceding defeat to Congress and warning that an "unthinkable" budget deficit could result. The announcement meant the estimated 17 million needy Americans who now use federal food stamps will continue to pay the same rates for their stamps through the rest of the year, instead of the higher rates Ford had ordered effective March 1. In a statement issued at the White House as Ford was flying to New York, the President said he would not try to fight "the clear will of which last week overwhelmingly passed legislation nullifying Ford's food stamp order. Today's Journal 4 Sections, 48 Pages Entertainment Supplement Amusements 18-19 Focus 6-7 Astro-Guide 17 Health Column 23 Classified 25-31 Markets 22-23 Comics 17 Sports 13-15 Crossword 29 State News 16 Dear Abby 6 TV Log Ent. Tab.

Deaths 23 Vitals 23 Editorials 4 Weather 2 Not Taxable "We won!" By BOB FELTEN "Hot dog!" "About time!" A federal court ruling that "tokes" given casino dealers are gifts and not taxable income was the main topic of conversation Thursday in the Harolds Club recreation room where dealers took their breaks. The dealers, men and women, some young, some older, were all happy about the decision. But there was some skepticism and many questions among the group. "I'll bet they take it to the Supreme Court," one woman said. Another man asked, "Is it true? What does it mean?" "Does that mean I get the $700 I paid for the last three years back?" another woman asked.

Most of the dealers had heard about the decision as the casino grapevine buzzed with the news. "Everybody's talking about it," one woman said. "I heard about it from a girl who used to work here, but now works at Harrah's. She came running in shouting, 'We won. We Casino Dealers in Reno Buzzing About Big News Harolds Club general manager J.C.

Jordan shared the enthusiasm of his employes. "I think it's the greatest thing that ever happened to the dealers," Jordan said. "We feel that's the way it should Les Kofced, executive director of the Gaming Industry Association of Nevada, was more cautious in his reaction. "From what meager information we have, it certainly looks like a good break for the employes," he said, reserving any further comment until he is able to determine specifically what employes are effected. And a woman who has been dealing for more than 20 years said the decision would mean a lot because it could increase the income to the individual dealers.

"When you think about it, it really means we'll make a little more money," she said. man was of the opinion that the decision would affect returns the dealers would file for 1974. "They have to do it that way until the appeal is decided, don't they?" he said. (See DEALERS, Page 2, Col. 3) Setback for IRS? Tips to casino dealers would no longer be taxable income if Thursday's ruling by a federal judge is upheld.

(Journal Photo) Sparks Man Held in Death Of 2-year-old The death of a two-year-old Sparks girl Thursday has led to the arrest of an 18-year-old Sparks man, police reported Thursday. Arrested for investigation of murder was Phillip Derryl Hill of 2497 Janelle Drive in Sparks, in connection with the death of Danalee Amber. Robards. Police said Hill was arrested at 8:30 p.m. Thursday on an open murder charge which carries no bail.

Police said Hill, who listed his occupation as an unemployed laborer, was babysitting the girl at the home of her mother, Pamala Robards, at 282 E. York Way in Sparks. They said they responded to a call at the residence at 2 a.m. Thursday in reference to the child not breathing. She was dead on arrival at St.

Mary's Hospital in Reno, police said. Police said an autopsy performed Thursday revealed the child was bruised, and that preliminary reports indicated the cause of death was by skull fracture and massive brain hemorrhage. In addition to the mother, the girl is survived by her father, Thomas Robards of Sparks, grandparents Mrs. Francie Lopez of Reno, Charles Robards of Reno, Mrs. Ester Dexter of Estacada, and Woodrow Dexter of Reno; great-grandparents Mrs.

Minda Robards of Casey, and Mr. and Mrs. Fred Poorman of Noble, and several uncles and aunts. Funeral services are scheduled for 2.p.m. Saturday in the Chapel of Alexander's Pyramid Funeral Home, with burial to follow at Mountain View Cemetery.

Canadian Gunmen Slay 4 in Hotel BROSSARD, Que. (UPI) Three masked gunmen entered a bar and opened fire late Thursday. Four persons were killed and four others were seriously wounded in what police said may have been a "settling of accounts" by the underworld. Police said the three gunmen entered the lounge of the Hotel Lapiniere about 11:20 p.m. and "just started Police said the four men killed in the barrage were sitting at a table in one corner of the lounge.

The four seriously wounded were sitting at a nearby table. One of the wounded was a woman. There were about 60 persons in the lounge at the time. Police rounded up all the patrons and took them to police headquarters for questioning. Reno's Morning and Sunday Newspaper Nevada Journal Speidel Newspaper 105th Year -No.

FINAL Friday, February 14, 1975 20c Daily- -50c Sunday girl Presses for Open Meeting Law Rose Challenges Solons Journal Carson City Bureau Nevada Lt. Gov. Bob Rose Thursday challenged legislators to "match your vote with your campaign rhetoric" by enacting strong open meeting, conflict of interest and campaign financing disclosure laws. "If you do not," Rose said during an address to the Carson Kiwanis Club, "I think it will be a violation of the people's trust." Specifically, Rose endorsed AB 32, which would require more frequent reporting by legislative candidates of their campaign expenses. Candidates now have to do so 15 days after a primary and 30 days after a general election.

The proposed bill will compel disclosure before and after 1 the primary, and prior to and after the general elections. Rose said also he favored a measure (AB52) that would extend the concept of disclosure to all races for statewide office, and he hoped a measure would be introduced requiring candidates for the legislature and for statewide office to disclose the source of their campaign contributions. "Campaign expenses show one end, but up front, where the money is coming in, should also be disclosed," he said. Rose gave his "wholehearted support" to Senate Bill 19 and Legislative Measure Asks Drug Prices to Be Posted CARSON CITY (UPI) The 'Callaghan administration's bill to require posting of prescription drug prices came into the Nevada Assembly Thursday. The measure, worked out by the State Board of Pharmacy, State Commerce Department and Pharmacy Association representatives, was introduced by Harley Harmon, D- Las Vegas and others.

The 1973 legislature allowed pharmacies to post prices and to advertise their prices, but it was not mandatory. Most did not either post or advertise prices. The new bill would require that prices of prescription drugs and medicines be posted in the pharmacies, and be given on the telephone to persons requesting them. "It's mostly for the elderly person who finds it difficult to go from store to store and compare prices," said State Commerce Director Mike Melner. The 1973 measure was part of a package designed to aid Nevada's senior citizens.

The package included a bill to give tax rebates to elderly residents who owned or rented property. It did not work out because Turkish Cypriot Leaders Proclaim Separate State NICOSIA, Cyprus (AP) Turkish Cypriot leaders on Thursday proclaimed a separate state in northern Cyprus and offered federation to the Greek Cypriots. President Makarios of Cyprus said the unilateral move "demonstrates utter contempt for the resolution of the United Nations General Assembly and Security Council," and his government called for an urgent meeting of the Security Council. A statement said the request was made jointly with the British government, which along with Greece and Turkey is a guarantor of Cyprus' independence. Emerging from a emergency meeting with his ministers and advisory National Council, Archbishop Makarios charged that the proclamation was "dictated by Ankara and supported Assembly Bill 85, which would require all meetings of the legislature be open to the public.

He added he had no objection to a compromise measure (SB49) which would require all meetings to be open except when a witness is unwilling to testify under those circumstances, or for a few other specific reasons. Some open meeting law is necessary, Rose said, so legislators know where they stand, and those planning to attend them will know whether or not they will be admitted. Also needed in Nevada, Rose said, is a law which "specifically says that public officials, legislators and the like, can't vote on a bill if they have a substantial financial interest in that piece of legislation." He said there may he some problems with a proposed bill (SB48) that does just that, but its intent is sound. Rose was apparently referring to Watergate when he said the nation can learn from its "great national tragedy. "I think we can learn that you have to have rules concerning open government and disclosing campaign financing." With regard to other topics, Rose said the biggest problem the legislature is facing is "trying to project what revenues we can anticipate in the next two years and trying to guess-estimate about the economy in Nevada and the United States because all the funding bills hinge on that factor.

"I firmly believe Gov. O'Callaghan has come up with a conservative and realistic budget," he added. of the cumbersome requirements for applying for the rebates, which were small. A bill yet to be introduced this session will ease the requirements and increase the amount of the rebates. Melner said the pharmacy board will require a booklet of specific size listing drug prices, be posted on the counter.

"I doubt whether too many persons will look through it, but many will telephone and ask for information," Melner said. "This will enable the elderly and the sick to compare prices among the various pharmacies in town." "In most states, such as California, pharmacies post a great big chart on the wall, but it's always in a place difficult to see. We feel the counter book answers that problem because it is a simple form, a book that can be opened to a large number of Melner said. "Anyone can walk in and use it, or they can phone and obtain the information." He said the names are in medical terms which the might not understand, but inquirer, merely have to look at the name on the doctor's prescription. American Car Sales Drop to 13-year Low DETROIT (AP) Car sales for the first 10 days of February dipped to a 13-year low despite increased sales for certain models involved in an aggressive price rebate program.

The four U.S. automakers said Feb. 1-10 deliveries were 138,108, down 5.1 per cent from 145,594 a year ago. by the Turkish In Athens, Greek Premier Constantine Caramanlis condemned the move as a "violently achieved coup threatening peace in an already unstable region." The northern 40 per cent of the island has been in Turkish hands since the Turkish army invaded the island last summer after a military coup against Makarios. The proclamation gave Turkish Cypriots, who comprise less than one fifth of the island's population, control over more than half of its natural resources much of it formerly owned by Greek Cypriots.

In Jerusalem, Secretary of State Henry Kissinger said the United States remains committed to the constitutional government in Nicosia and "will make every effort to encourage a peaceful solution." Mediterranean NORTHERN I SECTOR Sea NICOSIA Famagusta Larnaca Paphos Limassol CYPRUS 'Separation' of Cyprus: The northern sector of Cyprus was declared a "secular and federated state" Thursday by Turkish Cypriots. (UPI).