Are automatic gratuities charged by restaurants tips or income?

• January 23rd, 2018
• David Greene
• Comments Off on Are automatic gratuities charged by restaurants tips or income?

In a recent Fact Sheet (No. 2017-08) the IRS reiterated that mandatory service charges such as automatic gratuities charged for large dining parties and banquet event fees charged by the restaurant are income to the restaurant and not tips.  The…