The Internal Revenue Service (IRS) proposed a revenue procedure this week to crack down on the service industry's reporting of tips.
The Service Industry Tip Compliance Agreement (SITCA) program would be a voluntary tip reporting system in which the IRS and service industry companies cooperate, according to the announcement Monday. As part of the proposal, the IRS will give the public until early May to provide feedback on the program before implementing it.
"Those 87,000 new IRS agents that you were promised would only target the rich," tweeted Mike Palicz, federal affairs manager at Americans for Tax Reform. "They're coming after waitresses' tips now."
According to the IRS, the program would seek to "improve tip reporting compliance," reduce administrative burdens and provide more transparency and certainty to taxpayers.
"This is not a proposal for the auditing of servers," an IRS official told Fox News Digital. "Yesterday’s action was a proposal for comment – not a rule – based on over a decade of feedback from restaurants and other businesses seeking the increased flexibility for their overall tax compliance on tips."
"This proposal is not in effect and is intended to welcome further conversation from all interested parties before any rule is put into place," the official added.
Among the program's features, the agency lists "monitoring of employer compliance based on actual annual tip revenue and charge tip data from an employer's point-of-sale system, and allowance for adjustments in tipping practices from year to year."
It also states that participating employers would provide the IRS with annual reports, would receive protection from liability related to "rules that define tips as part of an employee's pay" and would have the flexibility to implant internal tip reporting procedures "in accordance with the section of the tax law that requires employees to report tips to their employers."
"There's no reason they'd be issuing guidance on how to crack down on this if it was only going to end up being voluntary," Palicz told Fox News Digital in an interview. "Ultimately, the goal is to go and grab as much revenue as possible and from whoever they can."
"All of this in the backdrop of — they told us they're not going to be coming after people earning $400,000 or less," he continued. "Well, here's a new IRS rule that's focused on bringing in tips from waitresses. That's what they're focused on doing, that's what they're putting new rules on."
https://www.foxnews.com/politics/bidens-irs-plans-crack-down-waiters-tips
