IRS vs. Cash Tips

[CaptUSA]

IRS looking to introduce new program that could erase cash tipping altogether

https://www.kwtx.com/2023/03/15/irs-is-looking-introduce-new-program-that-could-erase-cash-tipping-altogether/


WACO, Texas (KWTX) - The opportunity to leave a monetary tip for service is becoming more apparent when out shopping, and the IRS has taken notice.

It’s called the service industry tip compliance agreement, or S.I.T.C.A. for short, and it could change the way merchants receive tips.

As it stands now, when a card is used to pay, that information is sent to the IRS, automatically, even if you leave an unreported cash tip.

“The IRS uses what comes through cash registers and gets reported on credit cards, and that sort of thing, and then estimates the cash. They’ve been doing that for years,” said economist Ray Perryman.

What’s changing is that the point-of-sale system used would have to accept the same form of payment for tips as it does for sales.

This means card payments require card tips and cash payments require cash tips. No more paying with a card and tipping in cash.

“Our employees by law have to report 100% of their tips and our system makes them report that,” said popular Waco restaurant owner, Sammy Citrano.

Citrano owns one of the most popular destinations in the Waco area. To keep it that way, he ensures his employees report all their earnings, including tips.

“I don’t think it’d affect our people because we already pay all of the taxes on our tips,” said Citrano.

If you’re not reporting your tips already, heads up, that time is coming.

Any business or employee that continues to omit tip earnings can expect a visit from the IRS or a hefty tax bill.

“You’re going to be in one of the flags that they catch people and pretty likely audit them,” said Perryman.

The IRS claims this new program is just a part of modernizing how they receive information from merchants.

Times are changing for payment acceptance and the IRS wants to adapt, at the risk of losing cash tips.

 

[Matt Collins]

This is bogus. They cannot outlaw me handing cash to a waiter or waitress regardless of how I pay for my meal.

 

[acptulsa]

This is bogus. They cannot outlaw me handing cash to a waiter or waitress regardless of how I pay for my meal.

Of course they can.

If you think they may not, I'd be interested to hear why. But they can.

Getting a federal law passed in this country is easy. It's expensive, but it's easy as pie.

 

[Snowball]

cashless grid implementation.

precursor to mark of the beast.

no man buy or sell without selling soul to the Antichrist.

 

[Sonny Tufts]

This is bogus. They cannot outlaw me handing cash to a waiter or waitress regardless of how I pay for my meal.

They don't plan to. As proposed the service industry tip compliance agreement is a voluntary tip reporting program for employers.

Employers are responsible for their share of FICA taxes even on unreported tips received by their employees. In 2002 the Supreme Court ruled that the IRS is authorized to use an aggregate estimation method when a restaurant underreports its tip income and that restaurants could be held liable for taxes beyond what their individual employees reported for tips. The aggregate estimation method uses overall credit card charges to determine the average percentage tip rate paid by the customers. This rate is then applied to the total sales reported to estimate unreported cash tips.

The idea behind the proposed service industry tip compliance agreement program is to give employers in the service industry a way to report tip income without being liable for unpaid FICA taxes. The program would not force customers to do or refrain from doing anything.

 

[Snowball]

They don't plan to. As proposed the service industry tip compliance agreement is a voluntary tip reporting program for employers.

Employers are responsible for their share of FICA taxes even on unreported tips received by their employees. In 2002 the Supreme Court ruled that the IRS is authorized to use an aggregate estimation method when a restaurant underreports its tip income and that restaurants could be held liable for taxes beyond what their individual employees reported for tips. The aggregate estimation method uses overall credit card charges to determine the average percentage tip rate paid by the customers. This rate is then applied to the total sales reported to estimate unreported cash tips.

The idea behind the proposed service industry tip compliance agreement program is to give employers in the service industry a way to report tip income without being liable for unpaid FICA taxes. The program would not force customers to do or refrain from doing anything.

They can suck on a frozen pole, because tips are not income at all. They are gifts.

 

[Occam's Banana]

“He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.”

 

[Anti Globalist]

Sounds like a way to bring forth a cashless society.

 

[Okie RP fan]

Those 87,000 IRS agents the Biden Regime wants hired aren't going to go after millionaires and billionaires.

They're meant to go after us. The normal common people who are trying to make a little extra cash here and there. They're meant for the average Joe who made some money off of cryptos.

Once the common people start making a little money, the rich and politicians collude to keep us in our place.

 

[Okie RP fan]

Sounds like a way to bring forth a cashless society.

This too.

Central Bank Digital Currencies that a lot of soy boys are foaming at the mouth over.

 

[ClaytonB]

Yeah, make sure those waitresses pay "their fair share", dammit!!!

My MIC-paycheck depends on it.