Gratuity included? A new IRS rule could end, or at least curtail, the practice.
The Internal Revenue Service will soon begin classifying automatic gratuities as service charges that are taxable as regular wages and subject to payroll tax withholding. Currently, they're considered tips, and it's up to the wait staff to report them as income.
Ask Americans about the most pressing concerns for the nation, and overhauling the tax code probably isn't all that high on the list — that is, unless those Americans happen to be Rep. Dave Camp, R-Mich., and Sen. Max Baucus, D-Mont., the chairmen of the congressional tax-writing committees.
The two lawmakers are on a mission to simplify the tax code.
When they're out on the road selling that tax overhaul, they don't wear ties and they skip much of the formality of Washington — like last names even. Just call them Max and Dave.