IRS Extends Food Industry Tip Reporting Program

The Internal Revenue Service announced on December 1st that it is extending the Attributed Tip Income Program (ATIP) to December 31, 2011. The program was scheduled to end as of December 31, 2009.

The program simplifies the recordkeeping required for reporting tip income in the food and beverage industry. Participating employers report the tip income of employees by using a formula that uses a percentage of gross receipts, which are generally allocated among employees, based on the practices of the restaurant. Participating employees do not have to keep a daily tip log or other tip records. The IRS will not initiate a tip examination during the time the employer and employee participate in ATIP.

Employers enroll in the ATIP program by checking a box on IRS Form 8027. Employees of a participating employer need to sign an agreement with their employer to have their tip income computed under the ATIP program and reported as wages.

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