Business Services Industry
IRS Can Add Tips to Eateries' Tax Bills, Supreme Court Rules.
Knight Ridder/Tribune Business News, June, 2002
By Jerry W. Jackson, The Orlando Sentinel, Fla. Knight Ridder/Tribune Business News
Jun. 18--Many restaurants could owe thousands of additional dollars in taxes after the U.S. Supreme Court ruled Monday that the Internal Revenue Service can take a closer look at how cash tips are reported.
And some restaurants could be forced to close, industry experts said.
The calculating of taxes that businesses owe from employees' tips is a thorny task because often the tips are cash and workers report their own earnings.
The Supreme Court said federal law allows the IRS to estimate the amount of cash tips based on tips shown on credit-card receipts. The estimate is used to determine a restaurant's tax bill.
The ruling, which...
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