Indystar.com - When Thomas Howard sees an automatic gratuity on a restaurant bill, one thing is for certain: His server won’t be getting any more than that amount.

If restaurants tack on the charge to his bill, the Indianapolis resident said he doesn’t think servers should expect any more. But when it comes to leaving less, he thinks that’s not even allowed.

“I don’t think you can, can you?” Howard said. “You’ve got to go by whatever their policy is.”

He’s confused — and a little put off — by the whole “automatic gratuity” practice, and he’s not alone.

Even with automatic tipping, customers have always faced a decision over how much to leave a server. Now, thanks to an IRS ruling, restaurants are being thrown into the debate — and are faced with a decision of their own: Should tipping for large parties be left solely to the customer or should the restaurant tack it on to the bill?

The new IRS ruling that takes effect in January will treat automatic gratuities as service charges, rather than tips. The switch means servers will no longer be responsible for reporting those automatic tips as income. And it also means automatic gratuities will be considered a part of a server’s wages, making that money subject to payroll tax withholding and delaying receipt of those automatic tips until an employee’s next paycheck. Continue