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Same IRS that's only after the rich wants to establish program 'to improve tip reporting compliance'

Remember when the IRS was gonna hire 87,000 new employees to allow the agency to do an even better job of keeping Americans honest on their tax returns? A lot of conservatives were understandably concerned that this would only give the IRS even more power to crack down on poor- and middle-class Americans. But our concerns were unfounded, they said, because this was about ensuring that the rich pay their fair share. Everyone else would be just fine.

And then we found out about some of the stuff the IRS actually wanted to do. And we’re continuing to find out about the stuff the IRS actually wants to do. And the more we find out about the stuff the IRS wants to do, the less reason we have to trust them. Case in point, their proposal to “establish the Service Industry Tip Compliance Agreement (SITCA) program”:

Unless there a lot of millionaire and billionaire waitstaff out there, we’re not sure how this backs up the IRS’ claim that they’re chiefly concerned with the wealthiest Americans.

You’d think so, wouldn’t you?

It’s cute that you actually believe the IRS isn’t using “voluntary” as a euphemism. “Improve tip reporting compliance” doesn’t sound make it sound like they have any intention of keeping this voluntary. More:

The proposed SITCA program is designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance. The proposed program would also decrease taxpayer and IRS administrative burdens and provide more transparency and certainty to taxpayers. The proposed program includes several features:

  • The 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.
  • Participating employers demonstrate compliance with the program requirements by submitting an annual report after the close of the calendar year, which reduces the need for compliance reviews by the IRS.
  • Participating employers 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.
  • Participating employers have flexibility to implement employee tip reporting policies that are best suited for their employees and their business model in accordance with the section of the tax law that requires employees to report tips to their employers.

The intent of the SITCA program is to serve as the sole tip reporting compliance program for employers in various service industries and would replace the following programs:

  • Tip Rate Determination Agreement (TRDA)

  • Tip Reporting Alternative Commitment (TRAC)

  • Employer designed TRAC (EmTRAC)

Any time the IRS talks about “compliance,” your spidey senses should be tingling like crazy.

Speaking of tips, here’s a good one: next time someone tells you to have faith in the IRS — or the government in general — tell them to shove it.


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