The Wall-Street Journal reports that starting January the Internal Revenue Service will begin classifying that auto-tips as service charges.
That means they would be treated like regular wages, subject to payroll tax, instead of tips-which restaurants leave for workers to report as income.
The change could mean additional costs and more paper work for employers who say they use these tips gratuities to make sure their servers aren't stiffed on large tabs.
The IRS ruling was issued in 20-12 to clarify tax guidance on tips after they noticed a rise in auto gratuities.
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