The Biden Administrations Internal Revenue Service (IRS) has proposed a new plan to crack down on the service industry by having employers report their employees’ tips as taxable income.
The Service Industry Tip Compliance Agreement (SITCA) program is made possible by the increased technology used for tips to track them. According to the IRS report, the program would also relieve tax burdens on most taxpayers.
Subscribe to Florida Jolt Newsletter!
The proposed SITCA program is designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance. The proposed program would also decrease taxpayer and IRS administrative burdens and provide more transparency and certainty to taxpayers.
The program is also open to change before implementation, given the report claimed that “The IRS is issuing this guidance in the proposed form to provide an opportunity for public comment.”
If implemented, the IRS specified how it would ensure it was getting its money’s worth out of service industries.
Republicans Mock Biden and Slam His ‘Incoherent’ State of the Union Lies
“The monitoring of employer compliance based on actual annual tip revenue and charge tip data from an employer’s point-of-sale system, and allowance for adjustments in tipping practices from year to year. Participating employers demonstrate compliance with the program requirements by submitting an annual report after the close of the calendar year, which reduces the need for compliance reviews by the IRS.”
The program also rewards participating employers to sweeten the pot, protecting them from liability and offering flexibility.
Participating employers receive protection from liability under the rules that define tips as part of an employee’s pay for calendar years in which they remain compliant with program requirements. Participating employers have flexibility to implement employee tip reporting policies that are best suited for their employees and their business model in accordance with the section of the tax law that requires employees to report tips to their employers.
The program will replace three previous organizations within the IRS, the Tip Rate Determination Agreement (TRDA), Tip Reporting Alternative Commitment (TRAC), and Employer-designed TRAC (EmTRAC), which were largely ineffective.
The report comes in the same breath as Biden’s state of the Union speech, where he once again promised to raise taxes and swore it would not impact the middle class in any way. His administration backed the claim.
“President Biden is a capitalist and believes that anyone should be able to become a millionaire or a billionaire. He also believes that it is wrong for America to have a tax code that results in America’s wealthiest households paying a lower tax rate than working families.
Leaving aside the issue of what disincentivizing the most productive members of society would do to the economy, including working families, many were skeptical of the claim on its face, especially after the Biden Administration hired 87,000 new IRS agents.
With the rollout of this new tax plan on service industries, that skepticism seems to have been vindicated. Unless, of course, one believes those working in service industries are secretly the conniving billionaires Biden claims to be going after.
Other stories you may want to read:
Congressman Jerry Nadler Opposes to Saying Pledge of Allegiance, Gaetz Schools Him
- Zuckerberg Exposes Biden Admin’s Censorship - August 28, 2024
- Tulsi Gabbard Endorses Trump in Unity Wave - August 27, 2024
- Trump Vance WRECK the DNC - August 21, 2024