Legal Question in Tax Law in Indiana

Underreporting tips come back to haunt me

I work as a waiter in Indiana...Somehow the company has come up saying that all of the tipped staff have underreported tips about 15 of us.we just received a W2

form from the company for between 15,000 and 20,000 dollars each....They said they arrive at that figure by taking 8%

of the gross sales....While we may have underreported some.

This is way off...Any advice would be helpful


Fixin to be broke in KY

Asked on 1/27/03, 5:57 pm

1 Answer from Attorneys

C. David DuMond Law Offices of David DuMond

Re: Underreporting tips come back to haunt me

Is it possible that your employer is reporting more sales than have really been made? I have heard that some restaurant owners do so in order to launder illegal money. Or maybe it's a mistake. If there is no mistake as to the actual sales, then you must accept that the IRS will be hard to convince that tips are not AT LEAST 8 percent on average. Maybe you could take your regular, daily documentation and add some information to show that your restaurant is a real dump, patronized by tea-totalling Republican tightwad retired Methodist, Baptist and Presbyterian ministers. You can inform the IRS that you disagree with the amount shown, but you will need convincing evidence. If you believe the gross sales number is correct, then . . . . ask for a raise.

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Answered on 1/27/03, 7:31 pm

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