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Originally Posted by Shauk
I know drivers are SUPPOSED to claim their tips on a form when they check out for the night (which gets entered in to the computer and deducted from the normal paycheck) but it's not enforced because it's not the responsibility of the business to force it on employees, all they have to do is have a sheet/option for them to claim the tips. Just like your brothers employees could just say "oh I got stiffed" after they put the money in their pocket.
the only thing was, you couldn't do that with credit card or check tips.
cash is the best kind of tip.
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I really can't debate this because I have no restaurant experience. Well, at least not in the last 25 years thankfully. But My brother's e-mail is pretty plain he states "My accountant deducts taxes from employees based on 8% of sales for the shift." He went on to say he argued with his accountant that no one tipping and he shouldn't have to enforce the IRS rules. But his accountant told him it's a real hard sell to the IRS and a fight he should stay out of, to the IRS restaurant/food service equals tips.
If I read this correctly:
http://www.ustreas.gov/education/faq...iability.shtml
Then his account is doing it correctly. Sound like as long as you claim at least 8% of yours sales total as tips then there's no problem. If, as in his case, no one tips therefore no claims tips the restaurant has to deduct the amount as earned income regardless.
Any accountants here? Maybe they can clear this up. Maybe he's getting bad advice? Seems crazy to me to tax people on something you think they might be getting.