Makes your eyes glaze over, doesn’t it? I just have a few things to add here: I trained servers who were accustomed to reporting only the required 8% of their total receipts, and it was mildly amusing to me that their reported tips always added up to exactly that. Because I hate spending time training servers only to have them whisked away by The Untouchables, I pointed out to them that I was holding, in my hot little hand, proof that they had made more in tips than they were claiming; proof that the dreaded IRS would have automatic access to: their credit card slips. Just a heads-up to anyone who is considering under-reporting - there is often a paper trail that can trip you up.
That said, it may be of interest to undertippers that it is common practice* for the “house” to take a portion of a server’s credit card tips as a usage fee for taking credit cards. No foolin’. And that percentage is routinely as high as 5%. So let’s say a server makes $100 in verifiable credit card tips in one night - he or she has to report it. Even though he or she will then be giving $5 to the house, about $20 to be split between bussers and bar staff, and (in some places) an additional $5 or so to the hostess or sommelier or whatever. Leaving the server to take home $70, but paying taxes on the entire $100. Taxes are taken out of the paid wage of $2.13 per hour, which is why servers who do decent business often get those wonderful $0.00 paychecks.
*common practice - the AMERICAN EXPRESS CARD charges businesses a fee to accept the AMEX card, and to the best of my knowledge it is legal for the restaurant to pass these charges on to the servers. However, I know of plenty of establishments that make their own bookkeeping easier by charging servers a percentage of ALL their credit card tips - even though they can not legally charge for accepting MasterCard or Visa. Restaurant owners count on the fact that most servers don’t know this … but now you do.