In Rev. Rul. 2012-18, the IRS issued guidance about FICA taxes imposed on tips and the procedures for notice and demand for those taxes under Sec. 3121(q). Under Announcement 2012-50, the rules distinguishing between tips and service charges in the revenue ruling will not apply until 1/1/14.
Enforcement of such a ruling may result in double taxation and and unjustly low final wage paid to employees for duties performed. In addition this ruling may put further financial strain on small businesses already struggling to employ and create jobs.
Employees are already required to declare and pay taxes on all tips and compensation, and employers are required to collect income tax, employee social security tax and Medicare taxes on tips reported by employees.