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The Internal Revenue Service did not implement a new voluntary program that certain employers could have used to report tips earned by their workers. But the proposal is partly the basis for a Trump campaign TV ad that falsely claims Vice President Kamala Harris “weaponized” and “literally unleashed” the IRS on tipped workers.
The Service Industry Tip Compliance Agreement, or SITCA, program was proposed in February 2023 and offered for public comment until May 2023. If finalized, it would have replaced three existing IRS tip reporting programs that allow certain service industry employers to calculate the federal income and payroll taxes that already must be paid on tip-based earnings.
The IRS said the proposed program was aimed at increasing tax compliance, potentially reducing the need for more audits, but the proposal has been put aside.
“Treasury and the IRS have no plans to move forward with the voluntary program and, as such, there are no new reporting or compliance components,” Treasury Department spokeswoman Ashley Schapitl said in a statement emailed to FactCheck.org.
However, a campaign ad from former President Donald Trump mischaracterizes the proposal and falsely suggests that the program is active and targeting tipped workers.
The 30-second ad, titled “Here’s a Tip,” began airing in Nevada on Aug. 22, according to AdImpact, a service that tracks political advertising. The ad starts by warning...
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