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IRS Addresses ‘Tip Boxes’

At the end of each shift, then, the individuals decided how to allocate the tip box.  Here, the there was no evidence that the Taxpayer knew the actual amounts received, nor did it issue Forms W-2 or include those amounts on Forms 941.

During an audit, the IRS determined that the volunteers should be treated as employees for FICA tax purposes; consequently, the IRS issued a Letter 3523 to the taxpayer.