Tip Tax Fairness Act of 2002

Tip Tax Fairness Act of 2002 - Amends the Internal Revenue Code to prohibit the Secretary of the Treasury from issuing a notice and demand to an employer for Social Security taxes with respect to tips received by an employee until the Secretary has determined the amount of tips received by the employee.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5445 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 5445

To amend the Internal Revenue Code of 1986 to provide that an employer 
shall be liable for Social Security taxes on unreported tips paid to an 
employee only after the Internal Revenue Service establishes the amount 
                   of tips received by that employee.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 24, 2002

   Mr. Herger (for himself, Mr. Tanner, Mr. Kingston, Mr. Blunt, Mr. 
  Foley, Mr. McIntyre, Mr. McNulty, Mr. Ford, Mr. Graham, Mr. Ryan of 
    Wisconsin, Mr. Simmons, Mr. Manzullo, Mr. Gibbons, Mr. Smith of 
Michigan, Mr. Calvert, Mr. Jeff Miller of Florida, Mr. Gordon, Mr. Hall 
of Texas, Mr. Tiberi, and Mr. Pickering) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide that an employer 
shall be liable for Social Security taxes on unreported tips paid to an 
employee only after the Internal Revenue Service establishes the amount 
                   of tips received by that employee.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tip Tax Fairness Act of 2002''.

SEC. 2. EMPLOYER LIABLE FOR FICA TAX ON TIPS RECEIVED BY EMPLOYEE ONLY 
              AFTER IRS ESTABLISHES AMOUNT OF TIPS RECEIVED BY THAT 
              EMPLOYEE.

    (a) In General.--Subsection (q) of section 3121 of the Internal 
Revenue Code of 1986 (relating to tips included for both employee and 
employer taxes) is amended by adding at the end the following new 
sentence: ``The Secretary may issue a notice and demand to an employer 
for taxes imposed by section 3111 with respect to tips referred to in 
the exception in the preceding sentence only after the Secretary has 
determined the liability of each employee for taxes imposed by section 
3101 on such tips.''
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.
                                 <all>