Final answer:
The IRS does consider tips and gratuities as taxable income, therefore the answer is false. Additionally, the colonists' objection to British taxation was more about representation and spending rather than the principle of taxation itself, which is true.
Step-by-step explanation:
The assertion that the IRS does not consider tips and gratuities given to employees by guests or patrons as taxable income is false. In fact, the IRS considers tips as taxable income, and employees are required to report their tip income on their tax return. This includes tips received directly from customers, tips added to credit cards, and tips received from a tip-sharing arrangement. It is important for employees in service industries to keep accurate records of the tips they receive to properly report their earnings to the IRS.
Conversely, the statement that the colonists did not necessarily object to the principle of taxation, but rather how the tax money would be applied, is true. During the pre-revolutionary period in American history, many colonists were opposed to the way the British government was spending tax revenue and the lack of colonial representation in British Parliament when these tax decisions were made, which led to the familiar cry of 'no taxation without representation.'