APPLICATION OF EMPLOYER TAXES TO EMPLOYEES’ CASH TIPS.

SEC. 9006. APPLICATION OF EMPLOYER TAXES TO EMPLOYEES’ CASH TIPS. (a) Application of Tax to Tips.— Section 3121(q) of the Internal Revenue Code of 1986 (relating to inclusion of tips for employee taxes) is amended— (1) by striking “Employee Taxes” in the heading and inserting “Both Employee and Employer Taxes”; (2) by striking “other than for purposes of the taxes imposed by section 3111”; (3) by striking “remuneration for employment” and inserting “remuneration for such employment (and deemed to have been paid by the employer for purposes of subsections (a) and (b) of section 3111)”; and 101 STAT. 1330–289 (4) by inserting after “at the time received” the following: “; except that, in determining the employer’s liability in connection with the taxes imposed by section 3111 with respect to such tips in any case where no statement including such tips was so furnished (or to the extent that the statement so furnished was inaccurate or incomplete), such remuneration shall be deemed for purposes of subtitle F to be paid on the date on which notice and demand for such taxes is made to the employer by the Secretary”. (b) Conforming Amendments.— (1) Subsections (a) and (b) of section 3111(a) of such Code (relating to rate of tax on employers) are each amended by striking “and (t)”. (2) Section 3121(t) of such Code (relating to special rule) is repealed. (c) Effective Date.— The amendments made by this section shall apply with respect to tips received (and wages paid) on and after January 1, 1988.