2 0 00
Department of the Treasury
Internal Revenue Service
Instructions for Form 8027
Employer's Annual Information Return of
Tip Income and Allocated Tips
Section references are to the Internal Revenue Code unless otherwise noted.
Note: The filing requirement (more than 10 employees) is based on the
total of all employees who provided services in connection with the
provision of food and beverages at the establishment, not just the
number of directly tipped employees. Include employees such as
Items To Note
waitstaff, bussers, bartenders, seat persons, wine stewards, cooks, and
kitchen help. See Regulations section 31.6053–3(j)(10) for more
Complete the new worksheet under Who Must File below if you are
unsure about your requirement for filing Form 8027.
An optional worksheet is provided on page 4 as a means of checking
A person who owns 50% or more in value of the stock of a corporation
that runs the establishment is not considered an employee when
to see if your employees are reporting all of their tip income to you.
determining whether the establishment normally employs more than 10
Purpose of Form
New large food or beverage establishment. File Form 8027 for a new
Form 8027 is used by large food or beverage establishments when the
large food or beverage establishment if, during any 2 consecutive
employer is required to make annual reports to the IRS on receipts from
calendar months, the average number of hours worked each business
food or beverage operations and tips reported by employees.
day by all employees is more than 80 hours. To figure the average
number of employee hours worked each business day during a month,
All employees receiving $20.00 or more a month in tips must
divide the total hours all employees worked during the month by the
report 100% of their tips to their employer.
number of days the establishment was open for business. After the test
is met for 2 consecutive months, you must file a return covering the rest
Who Must File
of the year, beginning with the next payroll period.
If you are an employer who operates a large food or beverage
Exceptions To Filing
establishment, you must file Form 8027. If you own more than one
establishment, you must file Form 8027 for each one. There may be
A return is not required for:
more than one establishment (business activity providing food or
Establishments operated for less than 1 month in calendar year 2000.
beverages) operating within a single building, and, if gross receipts are
Fast food restaurants and operations where tipping is not customary
recorded separately, each activity is required to file a Form 8027.
such as cafeterias or operations where 95% of the total sales are
A return is required only for establishments in the 50 states and the
carryout sales or sales with a service charge of 10% or more.
District of Columbia.
When To File
If you are required to report for more than one establishment, you
must complete and file Form 8027-T, Transmittal of Employer's
File Form 8027 (and Form 8027-T) by February 28, 2001. However, the
Annual Information Return of Tip Income and Allocated Tips, with
due date if you file electronically (not by magnetic media) is April 2, 2001.
Extension of time to file. Filers of Form 8027 submitted on paper, on
A large food or beverage establishment is one to which all of the
magnetic media, or electronically may request an extension of time to file
on Form 8809, Request for Extension of Time To File Information
Food or beverage is provided for consumption on the premises.
Returns. File Form 8809 as soon as you know an extension of time to
Tipping is a customary practice.
file is necessary, but not later than February 28, 2001.
More than 10 employees, who work more than 80 hours, were
normally employed on a typical business day during the preceding
Where To File
File with the Internal Revenue Service Center, Andover, MA 05501.
Worksheet for Determining Whether
Reporting on magnetic media. If you are the employer and you file
To File Form 8027
250 or more Forms 8027, you must file the returns on magnetic media
Complete the worksheet below to determine if you had more than 10
(or electronically). For details, see Regulations section 301.6011-2.
employees on a typical business day during 2000 and, therefore, are
Specification for filing. Get the 2000 revision of Pub. 1239,
required to file Form 8027. It is the average number of employee
Specifications for Filing Form 8027, Employer's Annual Information
hours worked on a typical business day that determines whether or
Return of Tip Income and Allocated Tips, Magnetically or Electronically.
not you employed more than 10 employees.
This publication provides instructions on how to file and how to request
a waiver from magnetic media reporting because of undue hardship.
1. Enter one-half of the total employee hours worked
during the month in 2000 with the greatest aggregate
gross receipts from food and beverages .........................
2. Enter the number of days opened for business during
The law provides for a penalty if you do not file Form 8027 (and Form
the month shown in line 1 ................................................
8027-T) on time unless you can show reasonable cause for the delay.
Employers filing late (after the due date including extensions) should
3. Enter one-half of the total employee hours worked
attach an explanation to the return to show reasonable cause.
during the month in 2000 with the least aggregate gross
You may be charged penalties for each failure to—
receipts from food and beverages ...................................
Timely file an information return including failure to file on magnetic
media if required.
4. Enter the number of days opened for business during
the month shown in line 3. ...............................................
Furnish the employee's TIN (taxpayer identification number, usually
the social security number) on Form W-2, Wage and Tax Statement.
5. Divide line 1 by line 2.......................................................
Timely file Form W-2 and give a Form W-2 to the employee.
Include your EIN on any return, statement, or document.
6. Divide line 3 by line 4.......................................................
Include correct information on a return or statement. This penalty
7. Add lines 5 and 6. If line 7 is greater than 80 (hours),
applies to the omission of information as well as the inclusion of incorrect
you are required to file Form 8027 for 2000. ...................
Cat. No. 61013P