Final answer:
The IRS has allocated tip formulas, encourages servers to keep a record of tips, and provides tax reporting forms. Therefore, the correct answer is D. ALL OF THE ABOVE.
Step-by-step explanation:
The Internal Revenue Service (IRS) is involved in numerous activities associated with the collection and regulation of taxes within the United States. Specifically in relation to service industry employees, like servers, the IRS:
Has allocated tip formulas that help track and estimate the amount of tips earned based on sales, which is also known as a Tip Rate Determination and Education Program.
Encourages servers to maintain accurate records of tips earned, which aids in proper tax reporting and compliance.
Provides a variety of tax reporting forms that are designed to report income including tips. Forms such as the Form 4070 (Employee's Report of Tips to Employer) are used by employees to declare their tip income to their employers.
Thus, the correct answer is: D. ALL OF THE ABOVE.