Pacun Posted February 10, 2020 Report Share Posted February 10, 2020 Has any one successfully argued the IRS that a W-2 is wrong when it comes to servers on this situation: Every week a server gets $1000 in tips so his W-2 is for $52,000 in tips plus the $5 per hour for wages. The restaurant accepts cash but customers never pay cash in this high scale restaurant. The server gives 15% to the busser, 10% to the runner and 5% to the bartender. So in the year the server only made $39,000 but his W-2 shows $52,000. Also, the server already paid FICA on money that never received. Can I correct the W-2 and can the server get his FICA portion back? Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 10, 2020 Report Share Posted February 10, 2020 Your client should take this up with his or her employer if its felt that the W-2 is inflated. I wouldn't necessarily assume that it is or try to argue the point with the IRS. Are you sure the W-2 is wrong or that the employer doesn't know the % that is shared to the bussers and runners so that the correct amount is included in compensation? This seems unlikely if, as you say, most of the payments are via plastic as opposed to cash. Also, what proof does your client have to document the shared tips? Is there a tip pooling or sharing arrangement that the servers have agreed to participate in? You might want to check state regulations on tip pooling or sharing and read up on the amendments to the FLSA for this that occurred back in 2018. https://www.touchbistro.com/blog/tip-pooling-laws-in-restaurants/ 2 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 10, 2020 Author Report Share Posted February 10, 2020 Thank you for the info. It is common for the restaurants to assign a number to the servers and the W-2 is composed of all the tips reported under that number. Bussers and runners don't have such numbers and in some places they assign tips based on the hours worked. Bussers and runners in most restaurant report very little tip. Since servers were going home with a lot of cash without reporting in the 80s and 90s, the IRS was tough with restaurants and now the restaurants are dumping everything to the servers. It is hard to go to your manager and say: "Yesterday I made $500 in charge tips but I gave Jose $75, Mario got 50, and Miguel got $25. So, please manually adjust my tips to $350.... and by the way, my lovely manager, you have do it manually everyday for me and for the other 15 servers. One more detail, last year, you charged me extra for FICA. I have the reports and names to whom I tipped and their amounts, would you please also make that adjustment and refund me my FICA and correct my W-2?" I am pretty sure that the next time a client complaints that the iced water was too cold, that server will be escorted out of the business. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 13, 2020 Report Share Posted February 13, 2020 >>>>>The server gives 15% to the busser, 10% to the runner and 5% to the bartender. So in the year the server only made $39,000 but his W-2 shows $52,000. Also, the server already paid FICA on money that never received. Can I correct the W-2 and can the server get his FICA portion back?<<<<<< I think the key here is the server "Gives" to the busser, runner and bartender. By your OP, the server receives the tips, decided to spread the love around so therefore the FICA deduction would be correct. is there a requirement to share the tips? As Judy said, "is there tip pooling". "Is there proof the server gave the percentages". I would never change a W-2 form and that is an employer/employee issue and not yours. 1 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.