Report: Prairie Meadows Owes the IRS $60M

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ALTOONA, Iowa -- The Prairie Meadows Board of Directors was expected to release portions of its IRS audit to the public Wednesday.

Instead, the board released all 300 pages of the audit, which includes the casino’s response.

Channel 13 broke the news in March that the casino was at risk of losing its tax-exempt status. The IRS claims the casino makes too much money and should not be considered a nonprofit. The agency launched an audit in 2014.

The IRS says Prairie Meadows owes $60.4 million in back taxes and penalties dating back to 2012.

The IRS raised six issues in the audit, but the casino boiled them down to three main issues: Should Prairie Meadows have its tax-exempt status removed? If it's not revoked, should the casino be taxed on income generated from slot machines, the hotel and restaurants? The third issue raises the question of if Prairie Meadows is properly allocating expenses from the hotel and restaurants.

Prairie Meadows board members say they're confident in fighting to keep its tax-exempt status.

"Let the IRS come in and challenge the nonprofit status," said board member Bob Myers. " Let us win, then we won't have to address this question for a long, long time."

In Prairie Meadows' response, it provided the IRS numbers of how much it has helped the Polk County economy and how it helped the horseracing industry grow in Iowa.

The board hopes to hear back in 2-3 weeks. If not, it will file an appeal.

Check back for updates.

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