One more reason it's crap to be a waiter in America

As noted, this doesn't change the substantive tax treatment of tips. It just moves automatic tips into automatic reporting and up-front witholding instead of individual reporting and payment-on-filing (potentially with penalties for underpayment in advance.)

Unless you are planning on cheating on your taxes, this doesn't do any harm.

> Restaurants are already threatening to end automatic gratuities because it would be an administrative nightmare to do what the IRS now wants.

This is a thin excuse; if they are charging automatic tips in the first place, they are probably already tracking the information and would have minimal difficulty reporting it as wages and doing withholding from it (since they are already reporting and withholding from base wages.)

More likely, its being used as an excuse to present to tipped staff (who bear the cost of the change of restaurant policy) to justify stopping including gratuities for large parties, when the real reason is to increase the appeal of the restaurant to such parties, but where without an external party to redirect blame for the policy on, management feels that the staff morale drain and resulting reduction in performance/retention/etc. would hurt more than the removal of the policy would help.

This restauranteur thinks that tipping makes it harder to reward staff fairly, and that this is a direct cause of acrimony in the kitchen. Some of his arguments are dependent on CA state law, though:

(part 1) http://jayporter.com/dispatches/observations-from-a-tipless-...

(part 2) http://jayporter.com/dispatches/observations-from-a-tipless-...

> Restaurants are already threatening to end automatic gratuities

Please... do it. I don't mind tipping. In fact, I generally tip pretty well (only shorting when service truly deserves less). But it really irritates me when places add the tip in automatically.

Having said that, I don't think it is such a tragedy that some of the server's tips are included in their paycheck. Not many jobs let you take home part of you money everyday. I have to wait 2 weeks to get any of my money.

This is why I just say pay people a livable wage and forget about all of this bullshit - the only people this helps are the business owners. And lets face it they are already getting way too many tax breaks. The waiters will get screwed and the customers always feel as though they should give more. If you paid people a decent salary, they wouldn't have to depend on the crumbs you leave them.

The IRS is just interpreting the law as they see it. At some point they have to draw the line between a tip and a wage, and they draw the line so that an "automatic tip" is a wage.

All the rest of the article is irrational garbage. The fair comparison is not between how the IRS treats waiters and how they treat billionaires, but rather how the IRS treats waiters of a certain yearly income, and how they treat other workers of the same income.

1. Even with any impending crackdown, waiting tables is still a really good paying job if work anywhere but the cheapest greasy spoons (small tabs = small tips).

2. It's articles like this (squeeze the little guy instead of the millionaires/billionaires) that make me scratch my head as to why the Republicans continue to hate Obama so much. He's been great for the rich, and bad for the poor--just like W, but W was expected to be that way.