Restaurant.org - As the Internal Revenue Service looks at revising its voluntary tip agreements to improve tip-reporting rates in restaurants, the National Restaurant Association is urging the agency to simplify the agreements and provide employers and employees with greater protection from audits.

Some of the tip agreements – the IRS currently offers four -- are now 20 years old. The IRS announced this spring it’s looking into revisions across the board, especially to the Tip Reporting Alternative Commitment (TRAC) and Tip Rate Determination Agreement (TRDA). Thousands of restaurants have signed these agreements, but the agency maintains tip income remains significantly under-reported.

Restaurant employers who enter an IRS agreement generally agree to take on a bigger role in educating employees about tip reporting and taking steps to ensure more accurate employee tip reporting. Continue