Service industry businesses need to know about the new Service Industry Tip Compliance Agreement (SITCA) program. This program allows covered employers to voluntarily report to the IRS employee tip revenue based on information from their advanced point-of-sale, electronic payment and timekeeping systems. Why would your business volunteer to produce an annual tip report for the IRS? SITCA program participants can receive liability protection in the event employees don’t fully report their tips on their tax returns. So if you decline to participate in the SITCA program, the IRS could bill your business for the employer’s share of FICA tax on unreported cash tips.
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