Posted on 02/12/2023 9:57:41 AM PST by John Semmens
In the unrelenting quest to extract more taxes from the working portion of the population, the IRS is focusing on unreported tips income. Commissioner Douglas O'Donnell pointed out that "legislation enacted last year gave us the funding for an additional 87,000 armed IRS agents. Since unreported tip income has been a thorn in the IRS' side for generations we now have the manpower to track down and punish these tax chiselers."
O'Donnell denied that this initiative contradicts the President's ambition to extract more taxes from the wealthiest Americans, saying "trying to go after the wealthiest taxpayers is fraught with risk. They can easily 'lawyer up' to repel a direct attack. They could also retaliate by cutting back on donations to Democrat reelection campaigns. An indirect approach focusing on capturing the portion of their wealth given as tips to waiters, taxi drivers, golf caddies and the like strikes at the weakest link in the chain of financial transactions. Since the biggest tips come from the wealthiest customers we can pull more money from them through this strategy--fulfilling the President's promise to make the rich pay a greater share of the tax burden."
O'Donnell explicitly rejected the argument that tips are gifts rather than payments. "I know that there is no requirement for customers to give tips," he said. "However, if taxes were restricted to the wages paid to these service people the amounts taken by the IRS would be tiny. Why should the government have to suffer just because the wages paid by the employer are so low?"
The Commissioner insisted that "stricter enforcement of collections from tips would not be burdensome because we will simply assume that tips represent about 20% each transaction and tax accordingly. The taxpayers will have the option of presenting detailed data to prove that their actual tip income is lower."
If you missed any of the other Semi-News/Semi-Satire posts you can find them at...
https://www.gopbriefingroom.com/index.php/topic,491526.0.html
I’m perfectly fine beating up the IRS, but no, not on this issue. The last place I ate at, yesterday, gave me 3 options for tipping: 20%, 25%, 30%. I chose neither and gave them 10% (easy math). I’m through with this crap of having the tip, plus the sales tax, nearly equal the base cost of the food. Others can swim in it, but I’ve been to enough countries to know, FULL WELL, that our ‘tipping culture’ is out of control.
I’m guessing they’re probably considering going after tithes to the churches next. Hopefully, I’m wrong.
Ergo, the IRS has a record of the tips and expects them to be included on the employee's tax return.
Am I missing something here?
When a tip earner is audited, they ask how much in tips they earned. If the number sounds low, the agent assigns a reasonable amount for tips. The IRS has demographic information for occupations, locales and other factors.
“This sounds pretty straightforward. If I am not mistaken, tips received by a restaurant on credit cards are paid out on an allocated basis to the service staff and allocated tips are reported to the IRS on employee W-2s.”
Not quite.
They will also use this information to go after barter and the underground economy…
The only way to effectively go after the underground economy is a consumption tax, IMO.
What are you saying?
“Why should the government have to suffer just because the wages paid by the employer are so low?”
Not satire..that’s how the criminals really think.
I thought the IRS already did this decades ago?
They didn’t have enough manpower to conduct the kind of extractions to which the gov’t feels entitled to receive. TRecent legislation authorized 87,000 additional armed IRS agents. Now they can ramp up audits, stakeouts, and searches looking for money they can seize.
Whatever they seize will be construed as proof of tax evasion. Taxpayers will be pressured to sign away their right to the seized money and/or property or face prosecution and prison time. If the taxpayer refuses to sign away his or her rights it will be the taxpayer’s burden to prove that they didn’t commit a crime.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.