The Biden-Harris IRS created a new program last year to put the screws to tipped workers despite the Biden-Harris pledge against increased IRS audits on Americans making less than $400k per year.
This IRS crackdown on tipped service industry workers was announced just months after the Biden-Harris administration and congressional Democrats spent $80 billion to increase the size and power of the IRS while including zero new taxpayer protections.
Vice President Kamala Harris cast the tie-breaking vote in the Senate to increase IRS audit enforcement.
In a press release titled, “IRS introduces new service industry tip reporting program,” the agency announced a proposed revenue procedure to establish the Service Industry Tip Compliance Agreement (SITCA) program, a voluntary tip reporting program between the IRS and employers in various service industries “designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance.”
The SITCA program would replace existing tip reporting programs for employers with a far more intrusive program that requires employers participating in the program to allow the IRS access to transactions from their point-of-sales system.
Here’s the IRS describing this feature of the program in its own words:
“The monitoring of employer compliance based on actual annual tip revenue and charge tip data from an employer’s point-of-sale system, and allowance for adjustments in tipping practices from year to year.”
The SITCA program would also require a new paperwork burden on employers requiring them to file an annual report at the end of each calendar year to remain in compliance with the program:
“Participating employers demonstrate compliance with the program requirements by submitting an annual report after the close of the calendar year, which reduces the need for compliance reviews by the IRS.”
This Biden-Harris IRS program also took away audit protection for tipped employees. The IRS stated: “no tip examination protection is provided to employees under the proposed SITCA program.”
The Biden-Harris IRS chief did not provide an answer to the question of how many tipped workers make more than $400,000 per year and thus somehow deserved heightened IRS audit scrutiny.
Sen. Marsha Blackburn (R-Tenn. asked the following question to the Biden-Harris IRS chief:
“People in the service industry – hairdressers, wait staff, delivery personnel, gig economy workers – and they are incensed by this.
Many of them are women. And they are sole providers for their family. And you have said to Chairman Wyden and to Senator Crapo that you are not going after people under $400,000.
So let me ask you this. How many waiters, waitresses, hairdressers, barbers, gig economy workers do you know that are making more than $400,000 per year and why would they be targeted by this administration?”
The Biden-Harris IRS chief did not answer the question.
House Ways and Means Chairman Jason Smith (R-Mo.) also called out the Biden-Harris administration:
“Joe Biden’s radical war on the working class just expanded to tipped workers, further proof that working-class Americans who make less than $75,000 will bear the brunt of over 710,000 new IRS audits under the newly supercharged IRS. While the President talked a big game about going after billionaires in his partisan State of the Union address, it’s clear that the White House is doubling down on crazy and prioritizing going after hardworking middle-class employees.
“This is just the latest attack on the working class – the Biden IRS is still seeking ways to conduct surveillance on Americans’ personal bank transactions, and has merely delayed requiring full reporting of Venmo transactions for people selling used furniture. Ways and Means will demand accountability from the Administration which is undeterred in shaking down blue-collar workers and middle class families for every penny to fund its welfare for the wealthy and extreme left-wing agenda.”