The Internal Revenue Service (IRS) proposed a revenue procedure this week to crack down on the service industry's reporting of tips.
The Service Industry Tip Compliance Agreement (SITCA) program would be a voluntary tip reporting system in which the IRS and service industry companies cooperate, according to the announcement Monday. As part of the proposal, the IRS will give the public until early May to provide feedback on the program before implementing it.
"Those 87,000 new IRS agents that you were promised would only target the rich," tweeted Mike Palicz, federal affairs manager at Americans for Tax Reform. "They're coming after waitresses' tips now."
According to the IRS, the program would seek to "improve tip reporting compliance," reduce administrative burdens and provide more transparency and certainty to taxpayers.