Quote:
Originally Posted by treetop
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2) In the state of Florida, servers are required to report, and pay taxes on 8% of their total sales and are required to report ALL credit card tips(paper trail)
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I don't understand that assertion and ask if you have a reference other than the common "my uncle told me so when we were at the bar"
There is no income tax in Florida thus Florida has no interest in regulation of the income of servers. Perhaps when you said "In the state of Florida" you simply were saying that Florida does not allow its citizens to ignore the federal requirement. The IRS does have regulations and they have been successful in going after restaurant OWNERS for failure to pay.
The summary of the rules are at
Reporting Tip Income - Restaurant Tax Tips
To summarize the restaurant (not the server) is expected to report total tips of at least 8% of sales (not including take out) and allocate that 8% to servers and others. These individuals are to keep records of their tips received and submit a monthly record with name SSN etc. However, and this is important, the restaurant is only required to withhold taxes, FICA, medicare on the amount the employee reports (s)he received each month. It is not the owner's job to enforce honesty. I could not find any case where the IRS went after a server for under-reporting and we can debate whether that is good or bad, but they have gone after owners for failure to pay the employer's share of FICA. This went to the Supreme Court in Fior D'Italia case and the restaurant was forced to pay FICA but no action against the employees for failure to report.