Question about automatic gratuities

[Terrena]

You can go to guest services and tell them you don't want the gratuities to be automatic. Then, at the end of the cruise you can give the gratuities to your servers and hostesses in the envelope provided. That way, you don't have to worry about how the gratuities are charged automatically. It's what we do. Sometimes we give a little more depending on the service and rarely a little less because of the service.

 

[Amandine]

Has anyone tried the tip I saw online of writing a certain sentence on the receipt in America so that 100% of the tip goes to the server and the tax man doesn't get any? I wish I could remember the actual sentence that you write on it but my memory is terrible.

I've seen several news articles on that. Here's one sample: http://www.foxnews.com/food-drink/2...ess-tax-exempt-personal-gift-in-lieu-tip.html

The question is whether the IRS would actually agree that it's a "personal gift" and not a tip. If I were the server, I wouldn't want to take that risk, given that the circumstances would very clearly point to it being given in direct response to the fact that I just served the person a meal -- which is pretty much the standard expectation for tips, not for gifts.

 

[Dug720]

I've seen several news articles on that. Here's one sample: http://www.foxnews.com/food-drink/2...ess-tax-exempt-personal-gift-in-lieu-tip.html

The question is whether the IRS would actually agree that it's a "personal gift" and not a tip. If I were the server, I wouldn't want to take that risk, given that the circumstances would very clearly point to it being given in direct response to the fact that I just served the person a meal -- which is pretty much the standard expectation for tips, not for gifts.

Yeah, I seriously doubt it would work. Most of the time there is a certain amount the server is expected to have in tips (generally in situations where they are "officially" paid below minimum and the difference i to be in taxes) and that amount IS reported. Additionally when tips have to be split among employees - as is usually the case that the bartender gets some, the busboy gets some, etc. - I'm pretty sure the total amount is recorded (and if you start stiffing your coworkers, they WILL find out and then things will not be pleasant) and employers have to file some kind of report so that the government gets the information. And then the server is to self-report on their taxes.

Now, do people cheat and under-report? I'm sure a lot of them do (and there are probably some who fail to report at all), but it is taking a chance as every year people are randomly selected for an audit. Get caught and there are penalties in addition to having to pay those owed taxes. So most people are not going to want to risk it.