Service Industry Tip Compliance Agreement (SITCA), a new planned tip reporting procedure, was made public by the IRS last month.
Service workers’ tax obligations may increase as a result of the voluntary tip reporting program between the IRS and employers in different service businesses. The program aims to decrease the estimated $1.66 billion in yearly unreported tip money and increase compliance with gratuity reporting.
What Is Service Industry Tip Compliance Agreement?
Tens of billions of dollars in taxes are at risk because, according to a 2018 research by the Treasury Inspector General for Tax Administration, 30% of businesses with tip agreements fail to declare earnings.