Does the IRS have another reason for suggesting tip-reporting changes?

Working Lunch: "I see the fine hand of the anti-tipping lobby at play here," says co-host Joe Kefauver.

The Internal Revenue Service announced recently that it will investigate how POS systems and other restaurant technology could be used to pinpoint what servers and bartenders collect in tips. The stated goals are to compute taxable income more precisely while making the tip reporting process less burdensome for employer and employee alike. But might the much-feared agency also have a political agenda?

This week’s episode of Working Lunch, the political-affairs podcast, speculates that other considerations may be in play. Is the fearsome agency subtly supporting the Biden administration’s pro-union stance?

More accurately measuring tipped employees’ taxable income would likely increase what both worker and boss owe Uncle Sam in payroll assessments. That makes tipping a less desirable form of compensation, a rallying call right now for union-backed groups like One Fair Wage.

“I see the fine hand of the anti-tipping lobby at play here,” said Joe Kefauver, co-host of Working Lunch and a principal in the government-affairs lobbying firm Align Public Strategies.

Plus, better data collection could swell the revenues of unions that count tipped workers as members. Dues are assessed as a percentage of a worker’s compensation. The higher that amount, the more money the union collects, noted Franklin Coley, co-host of the podcast and Kefauver’s business partner in Align.

For unions, “there’s more comfort in pushing labor toward more of a traditional paycheck,” said Coley.

The duo also looked at the landmark predictive-scheduling bill that’s now under consideration in Colorado, and what paid-leave proposals are afoot.

Download the episode from wherever you get your podcasts.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


Restaurants bring the industry's concerns to Congress

Neary 600 operators made their case to lawmakers as part of the National Restaurant Association’s Public Affairs Conference.


Podcast transcript: Virtual Dining Brands co-founder Robbie Earl

A Deeper Dive: What is the future of digital-only concepts? Earl discusses their work to ensure quality and why focusing on restaurant delivery works.


In the fast-casual sector, Chipotle laps Panera Bread

The Bottom Line: The two fast-casual restaurant pioneers have diverged over the past five years, as the burrito chain has thrived while Panera hit a wall. Here's why.


More from our partners