Payroll depts. working with restaurants need to note that the Internal Revenue Service announced Aug 8 that the five-year Attributed Tip Income Program (ATIP) will end Dec. 31, 2011. ATIP is a voluntary tip-reporting pilot arrangement for food and beverage employees that, the IRS noted, did not attract many participants.
The IRS said that employers who elected to participate with employees in ATIP for 2011 still will have access to program benefits through the end of the year. Employers that have participated in ATIP can consider other voluntary tip-reporting programs, such as the Tip Reporting Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC).
This is all part of the on-going IRS effort to ensure that Tips that are earned are reported as taxable income, and thus associated taxes are paid.