Question

In a large food or beverage establishment, on what form or schedule is any tip shortfall from a directly tipped employee recorded?

Answer 1

A tip shortfall from a directly tipped employee should be recorded on form 8027. This form should be filed with the Internal Revenue Service (IRS) in order to account for allocated tips. This informs the IRS of tips that were unaccounted for to the server as being less than the expected (and set) percentage.