June 16, 2009

Insufficient Income


During my second visit with Ida, I was asked to provide Income Verification so I rummaged through the drawer at home and snatched up my most recent pay-stub. As I looked it over, I realized that on paper I looked pathetic. Almost as if I'd be better off holding a sign on the side of the road, begging for change and fishing my dinner out of a garbage can. Because everyone knows that waiters and waitresses aren't paid shit for hourly, in hopes to earn enough in tips to make up for it.

I slid the pay-stub over to Ida, and watched as she snickered and rolled her eyes.

Ida: "$130 in two weeks? You'll never be approved for the loan."

Once again I reminded her that was not including tips, and she asked me why the tips were not accounted for on the pay stub. I went on to explain to her that at my restaurant it was only mandatory to claim 8% of our total sales as tips to be taxed, and the rest we get to keep free and clear as there is no way for the restaurant or the government to track any more than that amount. She then told me to pencil in my monthly income via tips, but that she doubted they would accept it as income, and I might have to go else where for the loan. She said she would call when she heard back and that it wouldn't take more then 24 hours. Three days later I still hadn't heard from her, so husband and decided we would use another option to buy the car. As we entered the bank together to make a withdrawal, I spotted Ida. I tried my best to avoid her as we waited in line, but she approached us rather dramatically.

Ida: "They declined you the loan. Insufficient Income. I knew they wouldn't accept it!"
She shouted.
The entire line at the bank turned towards us, and raised their eyebrows. Thanks for letting us know privately Ida, you rude bitch.

Ida: "Yah, your income from tips doesn't count, I told you it wouldn't."

Good thing we had another plan. But that Ida sure knew how to call us out in front of everyone.

16 comments:

JumpIt said...

what a bitch.

ilikedginger said...

That wasn't a credit union, right? They are usually better about this kind of thing.

I used to do auto loans for a certain bank and, to be honest, a reputable dealership itself will have more luck pushing a loan through than any one person coming in.

Mike N said...

You should really complain to regional/corporate management. That kind of thing is completely unacceptable. Forget the rudeness, which is bad customer service. She is broadcasting confidential information to the general public.

Trust me; if you were to summarize this in a letter and send to the CEO, you will definitely get a response...and she will feel the pain. You can find the CEO contact information from the bank's website. They have a dedicated team who are responsible for handling issues like this. They're usually called "Executive Inquiries" or something similar.

I encourage you to folow up on this. It really shouldn't be allowed to stand.

redgirl said...

That's horrible!! I really hope you complain. Not only was that the third strike (one you can try to put down to a bad day, but THREE???!!), but there was the bit about private/confidential information.
I hope you do, and that you tell us what happens!

Anonymous said...

Yes - complain about broadcasting confidential information to the entire crowd. Who else has she done this to? Can she be trusted if she can't do this properly?

Susan

Waiter Extraordinaire said...

I am with the others. Complain about the broadcast and change banks.

Anonymous said...

I bet she doesn't believe you make much in tips because she never tips. What a bitch.

purplegirl said...

That is fucking ridiculous. Report her. I'm pretty sure that violates some federal privacy rules.

teleburst said...

Well, I'm going to be the odd crank here. I'm not going to address the outrageous behavior of the loan officer, but this is the exact reason why I say that every server should declare every penny of their tips. Most servers look at me like I'm crazy, but this is really a hot button thing for me and I'll be posting about it on my own blog in the near future (and I'm sure I'll incur the wrath of my fellow servers).

First of all, it's illegal not to declare all of your income. I'd be pissed in a big corporation cheated on their taxes and I feel the same thing about my fellow servers. First of all, I think that everyone has to pay their fair share. My neighbor who gets a paycheck from Sears has to pay on their full income, so why shouldn't I? If I disagree with the amount of tax I'm paying, I can work to get people elected who will change it. Second, it reinforces the idea that some guests have that tips are a "gift" and not payment for services rendered. this drives me crazy. If tips were a "gift", they wouldn't be taxable at all. and it gives certain non-restaurant workers the platform to call us cheats and scoundrels and question why they should have to pay for our salaries when we don't even declare it as income in the first place. Third, this is exactly what you should expect if you don't declare your tips as income. Is a loan officer supposed to just take your word about unclaimed and untaxed income? I don't think so. If they do, then you're lucky and they are probably bending the rules (one of the reasons why our ecomomy is in the shitter right now - too many lenders "bending the rules"). Finally, don't you realize that you're screwing yourself out of Social Security money when you're older? yeah yeah, I know, many people don't think that they're going to get Social Security anyway, but why take the chance?

All of this is to save a few hundred bucks at tax time and risk IRS scrutiny from an audit? Frankly, this is a risk that I think people shouldn't take.

And let me tell you something - if your steakhouse is still under the impression that an 8% tip declaration is sufficient, they are running a serious risk of a restaurant-wide audit by the IRS. That's something that restaurants did in the old days before the IRS got serious about cracking down on undeclared income in the mid-90s. Not only are your restaurant risking an audit of its books and the returns of its servers, if you happen to be pulled for a random audit, you're going to be screwed. For real. they're not going to take your word for it, they're going to ask you for your Federally-required tip diary (yes, you are required to have one - look it up). And even if you keep a daily tip log, with your income claims, they'll go into the restaurant and start pulling your sales reports and comparing your credit card tip percentages with your total percentages against sales. and you're going to get nailed. I'm really surprised that any restaurant in the states is still doing that. I'm sure that yours is only one of a relative handful that's doing it anymore.

Frankly, if I were you, I wouldn't take any chances and I'd pull this post. If someone associated with the IRS happens read this, they might actually do some digging and try to find out who you are and where you work. I don't want to make you paranoid, but I wouldn't put it past them. After all, you've admitted to something that should probably not be admitted to on the internet.

Like I said, this warrants a post from me in the near future on why servers should declare all of their income. I had already planned to do that anyway - maybe I should move up the schedule. I'm not sure I'll enjoy all of the scorn I'll get from fellow servers, but, thems the breaks. I'm also sure that I won't change very many peoples' minds, but if I get a few people to do the right thing (and prevent them from getting screwed by the IRS), it will probably be worth it, especially if it's someone just getting into the business.

Sorry for the length...

"So You Want To Be A Waiter" blog
http://teleburst.wordpress.com/

kate said...

If it's a smaller bank, you should absolutely file a complaint, and speak to the branch manager. I'm suprised you didn't demand to see the branch manager then and there-that woman's behavior is absolutely inexcusable, and has ratcheted up considerably. Having gone through the bank switch thing recently myself, I know it's not always the easiest or most convenient thing, but being willing to put that on the table will give your complaint some weight and leverage.

Anonymous said...

I agree with everyone who says you should report Ida's bitch ass. There are laws about publicly revealing confidential information! And even if what she did is somehow not a violation of the law, it was unprofessional enough that she could, and should, be severely disciplined or fired. I would NOT do business with a place that hires people who behave like that, and I'll be sure to tell others to stay away--that's the message you should be sending her employers.

G.H. said...

teleburst- Thanks for the comment. While I disagree on certain aspects, you make a really great point.
However, you mentioned that my restaurant may be the only one that only requires an 8% tip deceleration, and I have to say, in the last 3 years I have worked in 5 different restaurants, (including corporate Red Robin) all of which only required a 10% tip deceleration. (and some only taxed on credit card tips since there is no paper trial of any cash tip transaction.)

As for my Steakhouse, we don't even handle our own tip deceleration.It is done by management during our check out each night.

teleburst said...

G.H, thanks for your reply.

When I talked about how many restaurants still used 8%, I said a "relative handful". I meant that most restaurant have gone way past the old 8% thing. 8% was routine in the "old days" but in the mid-90s, the IRS started really cracking down. They started with the big markets and have been working their way out into smaller markets. I really think that your restaurant is just "marking time".

When restaurants handle tipouts by imposing some sort of fixed percentage (especially when it's as low as 8% and doesn't take into account credit card vs. cash sales) without a TRAC, emTrac, TRDA or ATIP (where you don't have to keep a tip log) agreements with the IRS, they really are running a big risk.

You said, " I went on to explain to her that at my restaurant it was only mandatory to claim 8% of our total sales as tips to be taxed, and the rest we get to keep free and clear as there is no way for the restaurant or the government to track any more than that amount".

That's true, *until* they come calling. And, believe me, if your servers are only declaring 8%, at some point, some IRS person is going to wonder why your restaurant's servers make a lot less than other steakhouses. when most servers at high end steakhouses are declaring $30 - 60,000 a year, and yours is only declaring $20,000 (figures are only examples), someone's going to wonder. And if they decide to audit, it's simple to show that there's a restaurant-wide deficit in tip reporting. All they have to do is pull a month's worth of server's and restaurant paperwork. Then they run an average of credit card tip percentages and compare to the percentage of tips against all sales. Then they back out the cash sales and they'll see that the percentages are *still* out of whack, since cash sales usually are only 5 -10% of all sales. Plus, they'll demand to see how the restaurant declares tipped income and they'll put the restaurant management on the spot when they try to say that they only declare 8% for the servers. This might be your only saving grace because you are being forced to let the restaurant declare your tips. It won't, however, save you for interest and penalties.

I know one guy back n the 90s who got a tax bill for over $10,000 for 5 years of undeclared income!

The IRS might not ever come. But I wouldn't bet my life on it. And I wouldn't bet on not getting audited personally as well. the first thing that an auditor is going to ask for from a tipped emplyee is their tip log. If they don't have one (and I don't because I declare all of my income and if they go to my rpaperwork at the restaurant, it will be instantly clear as most of the time, I'm declaring something like 18 - 20% of all of my sales), they're going to hit the restaurant and demand that they open the books on you. When they do that, then it opens the books on everyone. So, you don't have to even get personally audited, it can be some other server that sets you up for audit.

(to be continued)

teleburst said...

Con't:

Sorry to be such a harpie on this. Just want to alert you that the restaurant is on very dicey ground by declaring 8% for all of their tipped employees. For those of us who work in medium to large markets, we've been dealing with this issue for 15 years now. I remember when they hit up my restaurant at the time around '96 or so. They basically said, you can sign a TRAC agreement voluntarily (yeah, right) or we'll go through your books with a fine-toothed comb. Guess what we did?

Ironically, a TRAC agreement can actually allows a restaurant to under-report legally as well, but at a much closer level of reality (like 12%). If the restaurant reports close to that level, the IRS doesn't get involved. Of course, since I report 100% of my income, I don't care one way or the other.

BTW, the new ATIP program allows the restaurant to make a blanket declaration for its employees. It's based on a calculation that the restaurant makes that's based on a set period's tip take for all tipped employees. 8% would certainly be too low to prove. Here's the information:

http://www.irs.gov/businesses/small/article/0,,id=163720,00.html

Here are some other links worth looking at:

http://www.irs.gov/businesses/small/industries/article/0,,id=98367,00.html

http://www.irs.gov/newsroom/article/0,,id=160536,00.html

http://www.irs.gov/pub/irs-pdf/p1244.pdf

http://www.irs.gov/pub/irs-pdf/p3148.pdf

Hope this gives you some perspective...

brit said...

#1 what a terrible terrible woman. if you ever go in again and she acts that way, ask to see her supervisor. Complain about harassment. I'm definitely not a complainer, but I'd wouldn't hesitate to do something in this situation.
#2 I work at Hooters, which is a VERY VERY corporate run business, and we either declare 10% or our tips in credit card sales. Which ever is bigger.

hoppytoad79 said...

Beyond rude and totally evil. Absolutely grounds for a complaint.