Instructions For Form 8027 (Page 3 of 6) in pdf

a check or money order made payable to the “United States

Allocated tips are not subject to withholding and are not to

Treasury” for the amount of the user fee required for

be included in boxes 1, 3, 5, and 7 of Form W-2.

determination letters.

For the current user fee amount, consult the first revenue

Specific Instructions

procedure of the year (for example, Rev. Proc. 2011-1,

2011-01 I.R.B. 1, available at

File a separate Form 8027 for each large food or beverage

ar03.html). This revenue procedure is updated annually as

establishment. Use Form 8027-T when filing more than one

the first revenue procedure of the year, but it may be

Form 8027. Do not attach any unrelated correspondence.

modified or amplified during the year. The user fees are

posted in Appendix A of the revenue procedure. Since the

Name and Address of Establishment

taxpayer is requesting a letter ruling determination, the

payment for the user fee must be submitted along with the

and Employer Identification Number

petition for the rate reduction.

Type or print the name and address of the establishment.

A majority of all the directly tipped employees must

They may be different from your mailing address, as in the

consent to any petition written by an employee. A “majority

case of employers who have more than one establishment.

of employees” means more than half of all directly tipped

If mail is not delivered to the street address of the

employees employed by the establishment at the time the

establishment, enter the P.O. box number. The employer

petition is filed. Employee groups must follow the

identification number (EIN) should be the same as the

procedures in Regulations section 31.6053-3(h); Pub. 531,

number on the Forms W-2 that you give to the employees

Reporting Tip Income; and Rev. Proc. 86-21.

and the Form 941, Employer’s QUARTERLY Federal Tax

The IRS will notify you when and for how long the

Return, that you file to report wages and taxes for

reduced rate is effective.

employees working for the establishment.

Note. You must attach a copy of your “lower rate”

Type of Establishment

determination letter from the IRS when filing a paper Form

8027. See Pub. 1239 for instructions on submitting a copy of

Check the box (check only one box) on the form that best

your “lower rate” determination letter from the IRS when

describes the food or beverage operation at this

filing electronically.

establishment.

•

An establishment that serves evening meals only (with or

Reporting Allocated Tips To

without alcoholic beverages).

•

An establishment that serves evening and other meals

Employees

(with or without alcoholic beverages).

•

Give each employee who has been allocated tips a Form

An establishment that serves only meals other than

W-2 that shows the allocated amount in box 8. The form

evening meals (with or without alcoholic beverages).

•

must be furnished to the employee by January 31 of the

An establishment that serves food, if at all, only as an

following year. If employment ends before the end of the

incidental part of the business of serving alcoholic

year and the employee asks for the Form W-2, a tip

beverages.

allocation is not required on the early Form W-2. However,

you may include on the early Form W-2 the employee’s

Employer’s Name and Address

actual tip allocation or a good-faith estimate of the

Enter the name and address of the entity or individual

allocation. Signify a good-faith estimate by writing “estimate”

whose EIN was provided earlier. Enter foreign addresses as

next to the allocated amount in box 8 of the Form W-2.

follows: city, province or state, and country. Do not

If no allocation was shown on the early Form W-2 or if the

abbreviate the name of the country.

estimated allocation on the early form differs from the actual

amount by more than 5%, give the employee a new Form

Establishment Number

W-2 marked “CORRECTED” with the correct information

Enter a five-digit number to identify the individual

during January of the next year.

establishments that you are reporting under the same EIN.

If you allocate tips among employees by the methods

Give each establishment a separate number. For example,

described in the instructions for lines 7a through 7c, you are

each establishment could be numbered consecutively,

not liable to any employee if any amount is improperly

starting with 00001.

allocated. However, if the allocation shown on the

employee’s Form W-2 differs from the correct allocation by

Lines 1 Through 8

more than 5%, you must adjust that employee’s allocation

and must review the allocable amount of all other

Credit Card Sales

employees in the same establishment to assure that the

error did not distort any other employee’s share by more

If the credit or debit charge receipts reflect tips, then you

than 5%.

must enter on lines 1 and 2 the appropriate amounts shown

on the credit card or debit card charge statements. See

Use the current version of Form W-2c, Corrected Wage

instructions for line 1 below.

and Tax Statement, to report the corrected allocation on a

previously filed Form W-2. However, if you discover the

Rounding Off to Whole Dollars

allocation error on Form W-2 after you issue it to your

employee but before you send it to the Social Security

You may round off cents to whole dollars on your Form

Administration (SSA), prepare a new Form W-2 with the

8027. If you do round to whole dollars, you must round all

correct information, and send Copy A to the SSA. Write

amounts. To round, drop amounts under 50 cents and

“CORRECTED” on the employee’s new copies (B, C, and

increase amounts from 50 to 99 cents to the next dollar. For

2), and furnish them to the employee. Do not write

example, $1.39 becomes $1 and $2.50 becomes $3.

“CORRECTED” on Copy A of Form W-2.

If you have to add two or more amounts to figure the

You do not need to send to the IRS separate copies of

amount to enter on a line, include cents when adding the

Forms W-2 showing allocated tips. The IRS will use the

amounts and round off only the total.

information shown on the Forms W-2 that you file with the

Line 1. Charged Tips for Calendar Year 2011

Social Security Data Operations Center.

Tip allocations have no effect on withholding income or

Enter the total amount of tips that are shown on charge

social security or Medicare taxes from employees’ wages.

receipts for the year.

-3-

Instructions For Form 8027 Page 3

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