The Internal Revenue Service is acutely aware of the volume of tip income generated in the United States. Therefore they are shifting the compliance aspect of this income onto employers. This is a direct result of our government’s need for more revenues including Social Security and Medicare taxes.
Tip Rate Determination and Education Program
An Internal Revenue Service program used to help restaurant owners educate their personnel about proper compliance with the tip income issues. If the restaurant owner uses the program and obtains the necessary signatures, the owner can require the employees be audited first prior to tax collection enforcement upon the entity.