Timeline for Reporting monetary gifts as a waiter/waitress?
Current License: CC BY-SA 3.0
9 events
| when toggle format | what | by | license | comment | |
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| Apr 25, 2017 at 22:43 | comment | added | NL - SE listen to your users | Let us continue this discussion in chat. | |
| Apr 25, 2017 at 22:43 | comment | added | David Schwartz | No. If the waiter or waitress relied on a declaration that they were all but certain was false, that would be simple fraud. It is obvious to the waiter/waitress that this was a false declaration made solely in the attempt to avoid taxes. | |
| Apr 25, 2017 at 22:25 | comment | added | NL - SE listen to your users | @DavidSchwartz I would probably distill it to a much simpler test. Tax evasion is out of compliance with the written tax code, whereas tax avoidance is in compliance. So given that tipping allows--a subjective judgment of the server's level of service that can justify--zero tip, would an explicit declaration of that judgment (the service was subpar) be in compliance with the IRS code or not? | |
| Apr 25, 2017 at 21:08 | comment | added | David Schwartz | Technically, tax avoidance is when you change the economic reality of a transaction in such a way that it legally reduces your taxes but wouldn't be a sensible change otherwise. Tax evasion is when you report or pay less tax than the law requires, which is (at least notionally) less than what is equitable given the economic reality of the transaction. But in practice, it can result in some fairly fine hair splitting. | |
| Apr 25, 2017 at 20:31 | comment | added | NL - SE listen to your users | @DavidSchwartz Funny, what's the test to tell the difference between tax evasion and tax avoidance? | |
| Apr 25, 2017 at 19:16 | comment | added | David Schwartz | But you concede that the thing the note asserts is false, right? You understand that the payment was in fact part of the server's wage paid by the customer in response to custom and social pressure. You don't dispute that, do you? If it stands up to scrutiny, that just means you got away with tax evasion. Right? Because I read the question as "is this tax evasion", not "how can I get away with tax evasion". What makes your answer contrarian? Do you think others think it's not possible to get away with tax evasion? | |
| Apr 25, 2017 at 18:46 | comment | added | NL - SE listen to your users | @DavidSchwartz The test is whether there was a service performed in which the money is compensating. Quid pro quo. My hypothetical note specifically asserts that there was not. | |
| Apr 25, 2017 at 18:07 | comment | added | David Schwartz | The question is, what would the IRS be scrutinizing? What is the test for whether something is a tip or a gift? | |
| Apr 25, 2017 at 14:26 | history | answered | NL - SE listen to your users | CC BY-SA 3.0 |