Type of Submission

Refereed Article


Tip reporting has always been an issue for the IRS. What happens when individuals under-report their tip income? History has shown that a large burden is placed upon the restaurants for the additional taxes that are lost due to unreported tip income. Using focus group interviews and survey research, this study addresses four research questions: 1. Do restaurant employers understand the tip reporting requirements? ; 2. Where does the IRS place the burden of record keeping and payment of lost taxes? ; 3. Are restaurants aware of the tip reporting resources available to them? ; 4. What are the implications of under-reporting tip income?