Many Utah bar employees fail to declare their tips. The food industry is not known for great pay and the ability to earn some cash or “under the table” income is attractive for many struggling food industry workers.
The IRS maintains that all earned income should be reported. Although the amounts that a typical waiter, bartender or bus boy makes is usually too small to attract attention, bar owners can face serious federal tax charges for failing to report cash income.
A North Ogden couple recently pleaded guilty for participating in a tax fraud scheme connected with failing to report bar income. The 54-year-old husband and his 52-year-old wife recently pled guilty in a Salt Lake City federal court.
The Utah Department of Justice reports that the couple’s tax fraud charges stem from their ownership of Teazers Sports Bar & Grill in Ogden.
Federal authorities allege that the couple “grossly underreported” their income by failing to report cover charges taken by Teazers. Cash generated by other items such as bar video games and pool tables were also not adequately reported.
The couple pleaded guilty to filing false tax returns and face up to three years in prison and a fine of $100,000. Authorities say that the couple will be sentenced on January 10, 2014.
Although the final amount that the couple owes the IRS will be determined during sentencing, it appears that the husband may owe over $220,000 in back taxes and the wife may owe around $115,000.