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Biden Administration Empowers IRS to Raid Workers’ Tip Jars

(Photo by Sam Dan Truong on Unsplash)

When I was a kid, my mother worked at a busy coffee shop in downtown Boston. When she got home at night, she placed her tips (mostly coins) on the dining room table so I could count them. (Back then, coins actually had value.)

Then, when I was a teenager, she worked at a busy restaurant in our local town. Again, I’d count her tips when she got home. She worked hard for those tips, and I enjoyed counting them. It wasn’t that much money.

Then in 1982 Congress gave the IRS the power to tax tips. Low paid workers who earn gratuities (tips) must report their tip income.

Yet the government has never trusted the accuracy and honesty of tip reporting.

So, now, the Biden Administration has beefed up the IRS’s ability to confiscate more money from those hard-earned tips.

In a Reason Magazine online article, reporter, Eric Boehm (2.10.2023) reports that “IRS Plans to Raid Workers’ Tip Jars.”

“A coming crackdown on $1.6 billion in unreported tips will continue the IRS’ long and ugly history of targeting low-income Americans.”

“The Treasury Department and IRS announced plans to overhaul existing programs that track tips earned by service sector workers.” …

“It also fits snugly within the Biden administration’s plans for a ‘comprehensive financial account reporting regime’ that… will significantly increase the cost of tax evasion.”

“As far as the IRS’ incentives go, targeting the working poor makes perfect sense. Wealthier Americans have the resources to fight back against an audit—but there might be $1.6 billion in unreported tips out there, and most of that was probably collected by people who don’t have an accountant on retainer.”

Read the full Reason Magazine exposé here…

End Image by ha11ok from Pixabay

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