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IRS Employer Tip Reporting Compliance Program

May 13, 2010
The Internal Revenue Service is starting a new compliance program to assess the employer's share of Federal Insurance Contributions Act (FICA) taxes on tips reported on Form 4137.

Employees who receive cash and charge tips of more than $20 per calendar month and do not report them have to report them on Form 4137, Social Security and Medicare Tax on Unreported Tip Income.

The service will notify employers via notice and demand letter with the amount owed. The agency will ask employers to include the taxed on their next Form 91 and will not subject employers to interest or penalties if they are compliant. Read the full article.
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