New Tax Rules May Mean More Taxes For Waiters - KLTV.com - Tyler, Longview, Jacksonville |ETX News

6/18/02 Tyler

New Tax Rules May Mean More Taxes For Waiters

The Supreme Court ruled 6-3 that the Internal Revenue Service can use their own formula to estimate tips received by servers, rather than accepting the servers' estimates. The difference could mean thousands of additional dollars in taxes every year from people who already earn less than minimum wage. Waitress and mother Shelley Garner, who works at Dwayne's Country Cafe, says she counts on her tips to make ends meet. "I really don't rely on my checks, really," she says. "They're so small, anyway." The IRS has long maintained that tips are being underreported. Now, they have the authority to enforce taxes based on a percentage of total sales. Waitress Mary Kidd thinks that's an unfair assumption. "They're telling me I have to make fourteen percent," Kidd says. "There's days where I don't care what I do or how I do it, I'm not going to add up to fourteen percent." Critics of the plan say the assumed tip percentage doesn't factor in tip-sharing, take-out food, or cheap customers. Diner Cindy Bullard thought the new plan goes against the very concept of tipping. Bullard said, "It's up to each individual. You tip a waitress differently based on the service you get." Lawyers for the restaurant industry say the next step involved will be on Capitol Hill. THey'll try and lobby Congress for changes in the IRS auditing techniques.
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