Instructions For Form 8027

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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.
General Instructions
4. Enter the number of days opened for business during
the month shown in line 3. . . . . . . . . . . . . . . . . . . .
5. Divide line 1 by line 2. . . . . . . . . . . . . . . . . . . . . . .
Items To Note
6. Divide line 3 by line 4. . . . . . . . . . . . . . . . . . . . . . .
Mark one of the new “yes” or “no” checkboxes under employer’s
name and address to indicate whether or not the establishment accepts
7. Add lines 5 and 6. If line 7 is greater than 80 (hours),
credit cards or other credit arangements. If the “Yes” box is marked,
you are required to file Form 8027 for 2001. . . . . . . .
lines 1 and 2 of Form 8027 must be completed. Also see the
instructions for lines 1 and 2 on page 3.
Note: The filing requirement (more than 10 employees) is based on the
Complete the Worksheet for Determining Whether To File Form
total of all employees who provided services in connection with the
8027 (below) if you are unsure about your requirement for filing Form
provision of food and beverages at the establishment, not just the
8027.
number of directly tipped employees. Include employees such as
You may want to use the Employer’s Optional Worksheet for
waitstaff, bussers, bartenders, seat persons, wine stewards, cooks, and
Tipped Employees on page 4 as a means of checking to see if your
kitchen help. See Regulations section 31.6053-3(j)(10) for more
employees are reporting all of their tip income to you.
information.
A person who owns 50% or more in value of the stock of a
Purpose of Form
corporation that runs the establishment is not considered an employee
Form 8027 is used by large food or beverage establishments when the
when determining whether the establishment normally employs more
employer is required to make annual reports to the IRS on receipts from
than 10 individuals.
food or beverage operations and tips reported by employees.
New large food or beverage establishment. File Form 8027 for a
All employees receiving $20.00 or more a month in tips must
new large food or beverage establishment if, during any 2 consecutive
TIP
report 100% of their tips to their employer.
calendar months, the average number of hours worked each business
day by all employees is more than 80 hours. To figure the average
number of employee hours worked each business day during a month,
divide the total hours all employees worked during the month by the
number of days the establishment was open for business. After the test
Who Must File
is met for 2 consecutive months, you must file a return covering the rest
If you are an employer who operates a large food or beverage
of the year, beginning with the next payroll period.
establishment, you must file Form 8027. If you own more than one
Exceptions To Filing
establishment, you must file Form 8027 for each one. There may be
more than one establishment (business activity providing food or
A return is not required for:
beverages) operating within a single building, and, if gross receipts are
Establishments operated for less than 1 month in calendar year 2001.
recorded separately, each activity is required to file a Form 8027.
Fast food restaurants and operations where tipping is not customary
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.
If you are required to report for more than one establishment,
When To File
!
you must complete and file Form 8027-T, Transmittal of
File Form 8027 (and Form 8027-T when filing more than one Form
Employer’s Annual Information Return of Tip Income and
CAUTION
8027) by February 28, 2002. However, the due date if you file
Allocated Tips, with Forms 8027.
electronically (not by magnetic media) is April 1, 2002.
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
following apply:
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, 2002.
More than 10 employees, who work more than 80 hours, were
normally employed on a typical business day during the preceding
Where To File
calendar year.
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
(or electronically). For details, see Regulations section 301.6011-2.
Complete the worksheet below to determine if you had more than 10
Specifications for filing. Get the 2001 revision of Pub. 1239,
employees on a typical business day during 2000 and, therefore, are
Specifications for Filing Form 8027, Employer’s Annual Information
required to file Form 8027 for 2001. It is the average number of
Return of Tip Income and Allocated Tips, Magnetically/Electronically.
employee hours worked on a typical business day that determines
This publication provides instructions on how to file and how to request
whether or not you employed more than 10 employees.
a waiver from magnetic media reporting because of undue hardship.
1. Enter one-half of the total employee hours worked
Penalties
during the month in 2000 with the greatest aggregate
gross receipts from food and beverages . . . . . . . . . .
The law provides for a penalty if you do not file Form 8027 (and Form
8027-T) on time unless you can show reasonable cause for the delay.
2. Enter the number of days opened for business during
Employers filing late (after the due date including extensions) should
the month shown in line 1 . . . . . . . . . . . . . . . . . . . .
attach an explanation to the return to show reasonable cause.
3. Enter one-half of the total employee hours worked
You may be charged penalties for each failure to —
during the month in 2000 with the least aggregate
Timely file an information return including failure to file on magnetic
gross receipts from food and beverages . . . . . . . . . .
media, if required.
Cat. No. 61013P

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