With the new year came new Internal Revenue Service rules on automatic gratuities that may change how restaurants handle tips for large parties. The IRS’ revised Ruling 2012-18 draws a sharper distinction between tips and service charges. Many restaurants for years have added fixed gratuities to parties of five or more, but the new IRS rules on what constitutes a tip require restaurant owners to treat them as service charges, which are a part of wages. Joseph Henchman, vice president ...
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