Instructions For Form 8027 Page 3


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.
An establishment that serves evening meals only (with or
Reporting Allocated Tips To
without alcoholic beverages).
An establishment that serves evening and other meals
(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
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.


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