Ask the Tax Resolution Expert–Business Owner Needs Tax Help for Avoiding IRS Audits on Employees Underreporting Tips
Tuesday, August 11th, 2009Whether or not you are legally obligated to report tip as income has been somewhat of a fuzzy area (especially cash tips!). Skimping on reporting your full tip (100% of your tip retained) is considered deliberately underreporting income and may be subject to severe IRS audits and penalties.
If you made more than $20 in tips in any one month, you will have to report the full amount of the tip
