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Missouri cracks down on underreported tips

A state crackdown on under-reported tip income has Missouri restaurants crying foul. So far, restaurants have been fined more than $40,000 to make up for cash tips not reported by servers.

The Department of Revenue is conducting more than 1,000 audits at restaurants across the Show-Me State.

If auditors find cash tips reported at a restaurant are less than tips tracked through credit cards, the state declares cash tips to be underreported and requires the restaurant to make up the difference in income, instead of going after individual servers.

At restaurants like Manny’s, General Manager David Lopez says it’s unreasonable to expect small business owners to keep track of cash tips given directly to workers.

“There needs to be a certain type of accountability per individual,” Lopez said. “When a server makes cash tips, that’s their money. Our industry and our restaurant, my restaurant specifically, we do not see that money. That does not flow through our business, it’s their money. They work extremely hard for it, they do a fantastic job for it.”

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