DAILY WIRE
The Internal Revenue Service released a proposed revenue procedure on Monday which would entail employers in the service industry voluntarily reporting their workers’ tips to the tax agency.
The Service Industry Tip Compliance Agreement initiative, for which the IRS is soliciting feedback through early May, would be “designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance,” according to a notice from the agency. The program would exist to decrease “administrative burdens” on taxpayers and IRS administrators.
Businesses involved with the initiative would submit an annual report on tips to the IRS after each calendar year; participants would thereby “receive protection from liability under the rules that define tips as part of an employee’s pay for calendar years in which they remain compliant with program requirements.”
Individuals who work in restaurants, hotels, salons, and other service-oriented businesses are already required to keep a daily record of their tips and pay taxes on the earnings to the IRS.
The proposed rule comes after the IRS received an $80 billion windfall through the Inflation Reduction Act, permitting the agency to double its workforce. During his State of the Union address on Tuesday, President Joe Biden repeated his promise that the middle class would not pay more taxes as he introduced a proposal for a billionaires tax.
“Under my plan, nobody earning less than $400,000 a year will pay an additional penny in taxes,” the commander-in-chief declared. “Nobody. Not one penny…
