- 13 -
forthcoming. Under these circumstances, we do not consider this
an appropriate case to discuss in further detail the correctness
of the long-standing method of computing gross income from tips
by reducing the tips left on a waitress's table by the "payout"
she makes to busboys, bartenders, and other waitresses.
Respondent apparently does not dispute petitioner's
testimony that on the average she "paid out" $10 a day to
busboys, bartenders, cooks, and other waitresses. This amount is
in line with the 20 to 25 percent of tips allowed as "payouts" to
other employees in some recent cases. We, therefore, hold that
the amount of tip income of petitioner as determined by
respondent should be reduced in each year by $10 a day for
"payouts" to other employees.
The situation with respect to the cash payments to the
restaurant for breakage, misordered food, walkouts, and similar
items is different. We did not find nearly as many cases dealing
with this question as we did cases dealing with "payouts" to
busboys and similar employees. Also, we found no case making a
specific adjustment for these items, although some cases referred
in general to a consideration of the items.5 In this case
5 For instance, in Applegate v. Commissioner, T.C. Memo.
1980-497, we stated: "We also hold that the petitioner failed to
sustain her burden of proving that she is entitled to deductions
for the 'walkouts'". In Sanders v. Commissioner, T.C. Memo.
1979-352, we stated:
Finally, petitioner argues that respondent has not
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011