Tips to Get Taxed

By: Kim Morreale
By: Kim Morreale

The Supreme Court has given more power to the IRS, so the agency can estimate how much a worker should be taxed based on a servers credit card tips.

The Illinois restaurant association says while state restaurants do a good job in requiring employees to claim their income, the association is concerned that this decision will turn restaurant managers into tip police.

This decision stems from a lawsuit brought against the IRS by a California restaurant which claimed the IRS formula of estimating cash tips based on credit card tips doesn't take into consideration some stingy cash tips, takeout meals, or tip sharing.

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