26 U.S.C. § 6053 — Reporting of tips

(a) Reports by employees. An employee^* who receives, during a calendar month, tips that are wages (as defined in section 3121(a) or section 3401(a)) or compensation (as defined in section 3231(e)) must report all those tips to the employer in one or more written statements by the 10th day after that month. The employee must provide the statements at the times before that 10th day, and in the form and manner, required by the Secretary's regulations.

(b) Statements furnished by employers. If the tax under section 3101 or section 3201, as applicable, on tips reported by an employee under subsection (a) is greater than the tax the employer can collect under section 3102 or section 3202, as applicable, the employer must give the employee a written statement showing the excess. The statement must be provided at the time, contain the additional information, and use the form that the Secretary's regulations require. When those regulations require it, the employer must file a duplicate of the statement with the Secretary^*.

(c) Reporting requirements relating to certain large food or beverage establishments. (1) Report to Secretary. For each calendar year, each employer of a large food or beverage establishment must report to the Secretary, at the time and in the manner set by regulation: (A) the establishment's gross receipts from providing food and beverages, other than nonallocable receipts; (B) the total charge receipts, other than nonallocable receipts; (C) the total charged tips shown on those charge receipts; (D) the sum of (i) the total tips employees reported to the employer under subsection (a), plus (ii) the amount the employer must report under section 6051 for service charges of less than 10 percent; and (E) for each employee, the amount allocated to that employee under paragraph (3).

(2) Furnishing of statement to employees. Each employer described in paragraph (1) must give each employee of the large food or beverage establishment, in the manner the Secretary's regulations require, a written statement for each calendar year showing: (A) the employer's name and address; (B) the employee's name; and (C) the amount allocated to the employee under paragraph (3) for all payroll periods ending during the calendar year. The employer must give the statement during January of the following calendar year.

(3) Employee allocation of 8 percent of gross receipts. (A) In general. For paragraphs (1)(E) and (2)(C), the employer must allocate, as tips for this subsection's requirements, among employees who perform services during a payroll period and customarily receive tip income an amount equal to the excess of (i) 8 percent of the establishment's gross receipts, other than nonallocable receipts, for that payroll period, over (ii) the total tips those employees reported to the employer under subsection (a) for that period.

(B) Method of allocation. The employer must allocate the amount under subparagraph (A) either (i) based on a good-faith agreement between the employer and the employees, or (ii) if there is no such agreement, in the manner set by the Secretary's regulations.

(C) The Secretary may lower the percentage required to be allocated. If the employer or a majority of the employer's employees petitions, the Secretary may reduce the percentage of gross receipts required to be allocated under subparagraph (A) when the Secretary determines that tips are less than 8 percent of gross receipts. The percentage may not be reduced below 2 percent.

(4) Large food or beverage establishment. For this subsection, this term means any trade or business^*, or portion thereof, (A) that provides food or beverages, (B) where customers customarily tip employees who serve food or beverages, and (C) that normally employed more than 10 employees on a typical business day during the preceding calendar year. For subparagraph (C), regulations must apply rules similar to section 52(a) and (b). An individual who owns 50 percent or more in value of the stock^* of the corporation^* operating the establishment is not treated as an employee.

(5) Employer not to be liable for wrong allocations. The employer is not liable to any person if an amount is improperly allocated under paragraph (3)(B), as long as the allocation was made in accordance with the regulations prescribed under paragraph (3)(B).

(6) Nonallocable receipts defined. For this subsection, this term means receipts allocable to (A) carryout sales, or (B) services for which a service charge of 10 percent or more is added.

(7) Application to new businesses. The Secretary must prescribe regulations for applying this subsection to new businesses.

(8) Certified professional employer organizations. For a report required by this subsection, when a certified professional employer organization^* is treated under section 3511 as the employer of a work-site employee, the customer for whom the work-site employee performs services is the employer for purposes of reporting under this section. The certified professional employer organization must give the customer and the Secretary any information the Secretary prescribes as necessary to complete the report, by the time the Secretary prescribes.