Q: If I call a tail a leg, then how many legs does a dog have?
A: 4. You can call it whatever you want, it's still a tail.

The scenario is nonsense. There is a quid pro quo, the waitress served the customer and he tipped her. A $7 tip on a $24.47 check. He was generous, but misguided if he thought that this note would let the tip go untaxed.

And even though the article you link is fresh, the author has the gift threshold incorrect. This year it's $14,000, and has been so since 2013.

A cute story, and unlikely to be an issue for $7, but the IRS would take notice if this idea gained any traction.

Q: If I call a tail a leg, then how many legs does a dog have?
A: 4. You can call it whatever you want, it's still a tail.

The scenario is nonsense. There is a quid pro quo, the waitress served the customer and he tipped her. A $7 tip on a $24.47 check. He was generous, but misguided if he thought that this note would let the tip go untaxed.

And even though the article you link is fresh, the author has the gift threshold incorrect. This year it's $14,000, and has been so since 2013.

A cute story, and unlikely to be an issue for $7, but the IRS would take notice if this idea gained any traction.

Two references -

If Gifts Are Not Income, Why Tax Gratuities?

From the Tax Court Files: Is That Money a Gift or Income?

Q: If I call a tail a leg, then how many legs does a dog have?
A: 4. You can call it whatever you want, it's still a tail.

The scenario is nonsense. There is a quid pro quo, the waitress served the customer and he tipped her. A $7 tip on a $24.47 check. He was generous, but misguided if he thought that this note would let the tip go untaxed.

And even though the article you link is fresh, the author has the gift threshold incorrect. This year it's $14,000, and has been so for a few years.

A cute story, and unlikely to be an issue for $7, but the IRS would take notice if this idea gained any traction.

Q: If I call a tail a leg, then how many legs does a dog have?
A: 4. You can call it whatever you want, it's still a tail.

The scenario is nonsense. There is a quid pro quo, the waitress served the customer and he tipped her. A $7 tip on a $24.47 check. He was generous, but misguided if he thought that this note would let the tip go untaxed.

And even though the article you link is fresh, the author has the gift threshold incorrect. This year it's $14,000, and has been so since 2013.

A cute story, and unlikely to be an issue for $7, but the IRS would take notice if this idea gained any traction.