Posted on 02/08/2023 8:01:55 AM PST by Red Badger
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.”
The tip reporting initiative also follows an IRS proposal that would require Americans to report transactions above $600 made through payment settlement companies such as PayPal and Venmo. Following public backlash, the agency later announced a “transition period” for the implementation of the rule, which will still enter into effect beginning in the 2023 tax year.
Treasury Secretary Janet Yellen has likewise vowed that the funds from the Inflation Reduction Act would not be used to increase audit rates for American households earning less than $400,000 per year “relative to historical levels.” She failed to clarify that “historical levels” of enforcement were far higher as recently as one decade ago: audit rates for Americans earning between $25,000 and $200,000 declined 76% between 2010 and 2019, according to data from the Government Accountability Office.
Officials have also repeatedly stated that the funding would enable IRS staff to more easily assist individuals and businesses seeking to file their taxes. The Treasury Inspector General for Tax Administration nevertheless said in a report that the agency’s budget for enforcement activities will increase 69% over the next decade, while the budget for taxpayer services will increase 9%.
The report also showed that IRS officials “have not yet finalized what constituted the $400,000 income level or what historic audit level will be used for its metrics,” indicating that such matters are “still being discussed between the IRS and the Treasury Department.” The agency insisted there is not “an immediate risk” of violating the commitment because “employee attrition and hiring challenges will limit its ability to conduct more audits.”
And don’t forget the 10% for THE BIG GUY.
I think I have diagnosed what is wrong with liberals- they suffer from Veritaphobia: the fear of truth. Truth and facts are like what garlic to a vampire is like. They squirm and hiss and begin to melt whenever truth is anywhere near them.
This is what you get when government employees never had a real job. They have no clue what it is like in the private sector. There needs to be an employment limit on government employees. Government is not the place to get wealth. It’s not the place for a retirement plan. Private sector experience should be required for government employment and no one should be allowed to be employed by government for more than ten years in their lifetime. Add to that, anyone who has been employed by government should not be allowed to work for any business or organization that receives taxpayer dollars. Add even more to that, no employment by lobbying organizations after being employed by government.
Middle Class Won’t Be Taxed More
They don’t have anything left to tax.
Brandon won’t tax us any MORE...but he won’t tax us any LESS, either.
*SPIT*
There won’t be a ‘Middle Class’ to tax........................
Restaurants are already required by the IRS withhold taxes on tips, and to pay FICA taxes on tips given to employees.
If they don’t raise our taxes and crack down on tip income, who is going to provide all the reparations to disgruntled blacks and welfare to layabout druggies? Who will pay for the weapons being sent to Ukraine? Who will pick up the tab for all the gender affirming surgery? How will the big guy get his 10%?
Got to pay for all those illegals and Ukrainian aide somehow.
Hey, c’mon man, just going after those rich tax-cheats.
I pay tips in cash at a local, family-owned coffee shop. I hope they don’t declare it.
This will work until the One World Government crowd tells biden he has to make cash invalid. Then it’s all electronic, and they know every cent everyone has, and skim their share off the top.
Meanwhile, the ruling party elite will have nothing to worry about. (soros, biden, clinton, gates, bezos, obammy).
Same here. Pay cash whenever you can.
Indeed the democrats have been picking their pockets for years it’s one of the reasons they refuse to even talk about a flat tax they would find out how it feels to be the screwee not the screwer.
As Mr. Pink said, “... waitresses are one of the many groups the government f___s in the ass on a regular basis.”
IIRC, back when everyone tipped in cash, our tips were “estimated” and taxed based on the estimate.
Or... maybe the restaurant was ripping us off.
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