IRS requests comments on Consumer Tipping Survey Study

The IRS is soliciting comments concerning the consumer tipping survey study. The IRS is charged with collecting revenue legally owed to the federal government. One important category of income comes in the form of tips. Previous empirical research has shown income from tips to be significantly underreported, limiting the IRS’s ability to collect the proper amount of tax revenue. The IRS believes a new study of consumer tipping practices is needed in order to better understand current tip reporting behavior so tax administrators and policy makers can make the tax system fairer and more efficient. Therefore, the IRS wishes to develop updated estimates of consumer tipping revenue across numerous services where tipping is prevalent.

In support of this mission, the IRS is seeking a standard clearance to conduct a minimum, one-year fielding of a nationwide consumer tipping survey. The sample that would be used for this study, Ipsos’ non-probability online panel, was only selected after a pilot study was conducted which compared the results from this vendor to another panel source (GfK KnowledgePanel, a probability-based online panel) and an independent source of tipping data in order to determine which method yielded the most accurate results while reducing respondent burden and cost to the IRS. The findings from the pilot study demonstrated that there were no consistent differences in the results gathered from the panels when compared against each other or when compared against the 3rd party source of data. As such, the decision was made to use the non-probability panel due to the reduced cost per completed survey, which will allow for a larger data collection and more precise estimates of tipping behavior for certain, low-incidence services.

This initiative flows from Goal 1 of the IRS Strategic Plan for FY 2014-2017: Deliver high quality and timely service to reduce taxpayer burden and encourage voluntary compliance.

Written comments should be received on or before January 1, 2016 to be assured of consideration and should be directed to Christie Preston, Internal Revenue Service, room 6129, 1111 Constitution Avenue NW., Washington, DC 20224. (IRS Notice and Request for Comments, Federal Register, November 2, 2015.)

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