This is correct. The IRS is now going to spend decades litigating what is a "tip", and how it is different than, say, "commission". Tax cheats are going to treat income as "tips", and most cases won't be audited. Not to mention this is almost certainly going to depress wages in tip-heavy jobs. - ThreadSky

omrimarian.bsky.social • 12 days ago

This is correct. The IRS is now going to spend decades litigating what is a "tip", and how it is different than, say, "commission".
Tax cheats are going to treat income as "tips", and most cases won't be audited.
Not to mention this is almost certainly going to depress wages in tip-heavy jobs.

Reposted from Zoomer Antimillenarian ♨️

This is so fucked. This is a dangerous loophole that's going to risk getting us pre-GFC Greece levels of tax noncompliance.

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plowandstars.bsky.social•12 days ago

Wall Street and all Banking bonuses will be declared as tips.

dondechert.bsky.social•12 days ago

Coupled with reductions in workforce, seems like a recipe for focusing dwindling resources down.

bribleck.bsky.social•12 days ago

Goes to house. Any idea of its chance of passage without going back to senate for revote? Could this have been basically no reason to vote no? Agree that it sounds really stupid.

omrimarian.bsky.social•12 days ago

I think it's going to pass very quickly.

bribleck.bsky.social•12 days ago

This seems insane. Don’t they want to put it in the big beautiful bill (ahem)?

omrimarian.bsky.social•12 days ago

They want to pass the big bill through reconciliation. They can pass this one without.

shayelk.in•12 days ago

n00b question: I thought tips were well defined, due the minimum wage requirement?

shayelk.in•12 days ago

this is not suggesting it ain't bad, just that I don't see how much litigation on this can happen. in other words, I can see how this would be used for not-reporting, but not for planning.

epcot.bsky.social•12 days ago

I assume they’re gonna get cases on what “an occupation which traditionally and customarily received tips” is. Landlords ask for tips now, does that mean they qualify?

shayelk.in•12 days ago

I have the perfect definition: “any position which involves presenting that obnoxious square terminal to customers”

omrimarian.bsky.social•12 days ago

Whatever the definition is outside of tax law does not necessarily have any binding authority re the definition for federal tax purposes.

williameburns.bsky.social•12 days ago

People are also going to tip less.

pwnallthethings.bsky.social•12 days ago

another ugly case of a policy that people get emotionally attached to before thinking through what it *does*

pwnallthethings.bsky.social•12 days ago

like if you get the ~ same result in a normal non-abusable way by increasing the income threshold at which higher rates cut in, but because you lose the emotional link to "but I am a (or empathize strongly with) tipped workers" we instead get something that is worse for everyone, including them

jessicakmarin.bsky.social•11 days ago

I think the word you are looking for is BONUS…

muddyduckworkshop.bsky.social•12 days ago

It's not about you (or me), silly.

https://en.wikipedia.org/wiki/Snyder_v._United_States

profmarkovic.bsky.social•12 days ago

I imagine that it would be very easy to structure contingent fees and associate bonuses as tips.

mwrubin.bsky.social•12 days ago

Yeah the US will start to have Italy levels of black market economy.

geoffjentry.bsky.social•11 days ago

Isn’t this only for cash tips? Don’t know about you but converting my salary to cash would be enough of a pain in the ass that is not bother

badguitarist.bsky.social•12 days ago

I’m gonna send clients exclusively tip bills from now on.

davsionnach.bsky.social•12 days ago

But it's cash tips that get to be deducted. Which aren't even visible income unless you report them. So in order to deduct them, you have to report them which means Trump gets credit for absolutely nothing.

captainchamomile.bsky.social•12 days ago

“Cash tips” doesn’t mean just literal cash. It also includes tips paid via card and they often/usually get recorded & reported whether or not the tipped worker actively chooses to.

omrimarian.bsky.social•12 days ago

Great
People are going to report everything as cash tips. Let the IRS come and audit them.

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