Many of the taxpayers I represent before the IRS receive a significant portion of their income in the form of cash, check, or credit card, with no amounts withheld for tax. When this occurs, the responsibility is on the taxpayer to set aside a portion of the income for taxes. Poker players are no exception.

A typical problem is that the cash is sitting there, and they believe they can come up with the funds for the tax bill later. When tax time comes, too often taxpayers either “forget” to report the income, or report it, but can’t pay the bill, because they lived far beyond their means.

Ali Olyaie was a “VIP host” at the popular Las Vegas nightclub Pure. I’ve been to Pure, and their private cabanas are a great place to separate yourself from the raucous crowd. It doesn’t take much common sense to deduce that a “VIP host” receives generous tips from VIPs looking to enter the club immediately (the line to get in during peak hours is usually ridiculously long) and get some privacy. Sure enough, clubbers reportedly tipped him thousands of dollars a night.

Unfortunately for Olyaie, the IRS raided the nightclub after learning, among other things, that no taxpayers were claiming income from those tips. According to court documents, Olyaie reported $42,358 of total income on his 2006 tax return, and he pleaded guilty to actually earning substantially more. Olyaie’s sentence date is June 29.

Olyaie may have lived the high life serving VIPs in an upscale Vegas club, but now he’s about to pay the price for not properly serving Uncle Sam.