By John Dimsdale – Reposted from PublicRadio.org
 The IRS figures the food and beverage business should be sending in some 200,000 tip disclosure forms every year. But only about a quarter ever show up. The IRS wouldn’t go on the record, but said it recently hired an outside contractor to identify slackers and that it’s conducting more audits.
Here’s the way it’s supposed to work: Servers and valets are supposed to report their tips to the boss. The boss reports that cash as employee income. Both the establishment and employees pay taxes on it. But Patrick, a former parking valet in Nashville, who didn’t want his last name used, says it didn’t worked that way in his experience.
“It was more of a “don’t ask, don’t tell” policy with ignorance being bliss on both sides,” said Patrick.
He says restaurants aren’t anxious to pay extra taxes, and neither are workers. The National Restaurant Association wouldn’t grant us an interview about IRS compliance, but says it is working to improve tip reporting. A narrow sample of food service workers finds most decide not to report about half their cash gratuities. We granted them anonymity so they would speak freely.
Erik, a former bartender and waiter here in Washington, says he started out reporting all his tips.
“Originally, I was declaring 100 percent until an older server told me I was essentially being a moron,” said Erik. “She told me, you never declare all your tips, especially not all of your cash tips.”
Tips on credit cards have a paper trail so they have to be reported, but not cash tips. Restaurants say they do advise employees to report all tips — and Jessica, a former waitress from Upper St. Clair, Penn., says hers did.
“In the break room of the restaurant where I worked, they had an entire wall of posters and a lot of them had to do with reporting your tips and what happens when you don’t report your tips correctly,” she said. “There were newspaper clippings of people who got investigated by the IRS.”
Still, cash transactions have long been an opportunity for tax evasion. Sheldon Cohen started the national tip compliance program when he was IRS commissioner 50 years ago.
“Waiters are not less honest than other people,” said Cohen. “They have more opportunity than other people. We discovered it basically doesn’t go necessarily with the occupation, it goes with the opportunity.”
For example, Cohen says, back when he was commissioner, doctors were frequent tax scofflaws.
“Forty-five or 50 years ago doctors received most of their payments in small amounts,” he said. “Doctors’ visit was $5 or $10 and people left cash most of the time.”
It wasn’t long before insurance companies and credit cards put an end to cash changing hands, so doctors had a harder time hiding income. But restaurant servers and bartenders still get an average 40 percent of their tips in cash.
Chris Bergin, publisher of Tax Analysts, says the IRS is under the gun to capture more of that lost revenue.
“We’re running huge deficits. We’ve got an enormous debt,” said Bergin. “The IRS is under political pressure to close what’s called the “tax gap” and go after people who are not paying their taxes.”
But as long as tips are cash, and essentially a private transaction, there may be only so much the IRS can do.
 From chicagotribune.com by Ed Perkins, Tribune Media Services
The latest hidden mandatory add-on is a “health” charge added to restaurant bills. This scam cropped up first in San Francisco, but you can count on it to spread.
Nothing succeeds in the travel industry like a bad idea. The latest hidden mandatory add-on is a “health” charge added to restaurant bills. As far as I know, this scam cropped up first in San Francisco, but you can count on it to spread.
The rationale for this one is to cover the employers’ mandatory contribution to the City’s “Healthy San Francisco” health-coverage system. The charge actually is levied on employers, but at least some restaurants are adding a few dollars or percentage points to each customer’s bill to cover this charge.
The restaurants’ excuse for assessing this charge separately is to let customers know how much they’re paying for employees’ health coverage. That’s the same excuse hotels use when they add “resort” or “housekeeping” fees to unsuspecting guests’ room bills. It’s the same excuse airlines would use to exclude fuel surcharges from their advertised fares if the Department of Transportation would allow them. And it’s sheer nonsense. Employees’ health insurance is no less of a cost of doing business than rent, property taxes, food costs, security services and all the other inputs businesses require to operate. To single out health care for a separate surcharge is unwarranted.
The restaurants adding this fee self-righteously proclaim, “It’s not hidden; we print a notice on our menus.” But that, too, is nonsense: Presumably, restaurants could apply that same rationale for extra fees to cover the cost of electricity, heat or linen service. I haven’t seen any reports yet that San Francisco hotels are adding a similar charge. But hotels aren’t shy about piling on other fees and charges.
So far, I haven’t heard of “health” fees anywhere other than San Francisco. But, as noted, bad ideas travel fast, and I wouldn’t be surprised to see it copied in one form or another by restaurants in other areas.
 What can you do to avoid this fee? Presumably, not many of you would feel strongly enough about this minor scam to get up and walk out of a restaurant the minute you saw a notice about such a fee. And you probably wouldn’t feel like making a fuss when you’re paying your bill, either. But when you leave, you can certainly let the restaurant know that you resent this deception and that you won’t be returning.
I’ve noted before — and you have undoubtedly found out firsthand — that hidden mandatory fees have become a bane of travelers and of consumers generally. The reason seems clear: As more and more of you use the Internet to compare prices, suppliers find it increasingly important to make their first-screen prices look as low as possible. As a result, they’ve taken to carving out part of what should be the true base price and instead adding it in only later — sometimes before you buy, sometimes not until later.
Currently, mandatory extra hotel fees are far more troublesome than restaurant fees. Trip-Advisor (tripadvisor.com) posts more than 72,000 traveler reports of unexpected hotel fees of various types. Although some of those reports obviously cover the same hotels, the number of hotels resorting to this deception has got to be in the thousands.
Normally I write about practical information travelers can use, and I avoid taking “there oughta be a law” soapbox positions. But it seems to me that hidden mandatory fees are becoming prevalent enough to warrant some sort of government action. The Federal Trade Commission has the authority to police deceptive advertising, but it moves at a glacially slow pace and even then gives wide latitude to miscreants. What consumers need is some sort of overall national “buyability” standard for advertised prices, along with robust enforcement authority. Certainly, such a requirement is workable; it works pretty well right now for airfares.
Copyright © 2010, Tribune Media Services
From the Tip20! Forum by ~anonymous~
Tip20! Forum Contributor
Please take a minute to read.
Tipping your server at a restaurant has been a long-standing American tradition. While tipping 15% of the total bill has been the standard for a long time, that tip can vary depending on the service you receive. Here are a few ways to determine how much you should tip.
1.) The friendliness and attitude of the server has got to be a top priority in determining a tip. The food could be wrong because of a chef’s mistake, the room temperature could be cold because the manager set it that way…but a server’s attitude is nobody’s responsibility but the server’s. Most people that go into restaurants are happy and looking forward to eating a nice meal and not having to do the dishes afterwards. If you get a server with a poor attitude who seems “put out” by having to serve you, a very small tip, if any, would definitely send him or her a message. You should never have to put up with that. By the same token, a server who is happy, smiles a lot, and seems to thoroughly enjoy waiting on you, should definitely get 20% or 25% for making your evening even more pleasant.
2.) The food is certainly a factor. If your order comes out wrong, it may have been a chef’s mistake, but it’s something the server should have noticed before it was set in front of you. The quickness in fixing your order is important. If they fix it in five minutes, I wouldn’t hold it against the server. If the server seems to be bothered by the fact that you’re complaining about the order being wrong (again, there’s the attitude factor) or takes another 20 minutes to get you the correct order, a deduction from that 15% standard is certainly justifiable.
3.) Is your glass filled in a timely manner? A good meal is often not a good meal if you don’t have anything to wash it down with. If you go more than a few minutes without a refill, a slight deduction of the tip would be in order. On the other hand, if your glass is constantly filled to the rim, a slight increase should be given.
4.) The overall pace of your meal is important. You shouldn’t be getting your main meal one minute after your appetizer arrives. You shouldn’t have to wait five minutes to get the Parmesan cheese or ketchup that you asked for. And after your plates are cleared and you’ve had dessert, you shouldn’t have to wait 15 minutes for the check. Your meal should flow smoothly, from the time you sit down to the time you leave. While tipping 15% is easy enough to do, the tip should mean more to you as a patron. Servers make very little salary ($2.13 / hour) , living mostly on the tips they make. If they’re do a standard job, 15% is fine. But tipping more for an exemplary job can be extremely rewarding. And tipping less for an inadequate job could send them a message that they need to work harder or change their attitude.
A little quiz for those of you who have never waited tables:
1. What is the average hourly wage of a server?
2. How much should you tip your server?
3. Is it OK to verbally abuse, throw your food, your drink, even your cigarettes, at your server?
• If your answer to the first question was minimum wage, or more, you’re not even close.
• If you said “as much as I think he deserves” for No. 2, again, not even close.
• And if you laughed at the third question, fine, but don’t think it doesn’t happen.
LESSON TIME
Here’s your first lesson in diners’ etiquette: Remember that your waiter is a person. She doesn’t live just to serve you. More than likely she waits on you so she can pay the bills while she puts herself through school.
DON’T GET CHEAP
Here’s your second lesson: Your server’s livelihood depends on your tip. Restaurant owners (in many states) are not required to pay their employees more than $2.13 an hour because tips can be considered part of wages.
Just ask server Kim Harris, who works at Awful Arthur’s at Towers Shopping Center in Roanoke. Harris recently received a $49 tip, which sounds pretty good until you find out the check totaled $520. In the land of 20 percent tips, this one should’ve been $104.
“They still stiffed me even though they told me the service was great,” Harris said. In restaurant lingo, that’s known as the “oral tip.” And you wonder why your server isn’t always as friendly as you expect.
When you have a bad day at work it most likely doesn’t affect your salary, but in the service industry, one off remark and you’re not getting a tip, or at least not a decent one. All because someone didn’t give you the benefit of the doubt.
While on the subject of tipping, here’s a rant on the forum site bitterwaitress.com written by an anonymous server in Roanoke: “They come in once a week, every week and only leave 50 cents per person. They get extra refills, extra dressings, to-go drinks and are always complaining about SOMETHING! Stop coming in if you don’t like the food OR service! I’ve gone out of my way to actually be RUDE to these b—–s and they keep coming back! Even if you’re polite … no difference in tip! If all you can afford is 50 cent tips, then go to McDonalds and buy an extra side of fries! I don’t need your pity change!”
If this is you, there’s your wake-up call.
R-E-S-P-E-C-T
Another good rule of thumb? The Golden one. Respect your server. Just to reiterate, he’s there to serve you, but he’s not your servant.
“I had a guy cuss me out about his tab because he thought he was paying more than he should,” said Awful Arthur’s bar manager Chad Skeens. “When I walked by him, he flicked a lit cigarette at me so I had to bar him from the restaurant.”
A lit cigarette? Come on. Talk about being a jerk.
MORE TIPS
• Once you’ve been seated, don’t take it upon yourself to switch tables. Restaurants have a seating chart and certain sections belong to certain servers. You just might move to a section that just got “sat” and you’ll mess up the flow. Oh, and along those lines, don’t move another table next to yours if more friends show up. That other table is a potential tip for your server. Ask what can be done to accommodate your party.
• Try to let your server know everything you might need ahead of time. If you want a side of ranch dressing and your drink refilled, tell him both at the same time so he doesn’t have to make extra trips.
• Sometimes it’s tough to decide what you want to order, but if you tell the server you’re ready, be ready. If it’s busy, she doesn’t have time to wait for you to decide when she could be helping other customers or helping her fellow servers. And if you have a small child, order for her if she can’t make a decision. Time is money.
• If you’re seated at a table, don’t go to the bar to order a drink. Then you must pay the bartender instead of your server. Your server will gladly get you a drink.
• Don’t name drop in an attempt to get something free if you’ve only met the owner once or twice.
Now pass this around to all your friends and family to read. I’m sure that this is something that we have all thought about at one time or another. I am a server myself. I found this on a web site. I have talked to a lot of people that don’t realize a lot of this information, or are unaware. Remember you should want us to be just as happy as you want us to make you during your visit. You will definitely find that a server who is in a good mood, will give you better service and be much happier to serve you. Saying I have done a good job, and tipping awful (oral tip) is worse than no tip. Table turns are very important for your server. When the restaurant is busy think before you hang out for a long time, or tip for your stay and not just the bill. When people come in and sit for 2-3 hours having conversation remember that the server could have had several tables for the one you are holding. And last but not least, I have never worked in a restaurant where a server only had one table. Please try to be considerate when your server has many customers and you see that person is very busy, and just take into consideration that you are not the only person in the restaurant. Thank you and don’t forget to pass this on.
~anonymous~
Smoking ban hasn’t led to any citations
The Daily News By Rhiannon Meyers
GALVESTON — After more than two weeks, Galveston’s smoking ban has gotten a little hazy.
While some bars and restaurants are complying with the new law banning smoking indoors, on patios, decks and on sidewalks in front of restaurants and bars, smokers continue to puff away in banned areas across Galveston.
The Galveston Police Department has not issued any citations for smoking.
Most restaurants and bars have banned smoking indoors, but many business owners are turning a blind eye to those who light up on patios and decks, Dennis Byrd, president of the Galveston Restaurant Association and owner of The Spot, said.
Some Galveston establishments continue to allow smoking indoors, and that’s causing some problems for restaurants and bars that are attempting to comply with the indoor smoking ban, Byrd said. The Spot’s waiters, waitresses and bartenders have had trouble explaining to people that smoking is banned citywide, he said.
“We’ve got some customers who come in and say: ‘I don’t understand. I just smoked in a bar downtown,’” he said.
On Wednesday night, smokers lit up unabashedly at the Poop Deck, 2928 Seawall Blvd., and at Melrose Pub, 2002 Postoffice St.
Galveston resident Steve Parag said the smoking ban has influenced his decisions about which places he chooses to patronize. He said he stopped drinking at the bar at Salsa’s Mexican Restaurant, 4604 Seawall Blvd., despite the “fantastic margaritas,” when the restaurant banned smoking. But he said he still spends money at the Poop Deck, where he can enjoy a can of beer and a cigarette without being harassed.
Like many opponents of the smoking ban, Parag said the city council should have left it up to the discretion of business owners to allow smoking or not.
But Rex Bell, who owns Old Quarter Acoustic Cafe, 413 20th St., said he loves the ban. The former smoker said while he’s noticed other Galveston bars continue to allow smoking, he was ready to ban cigarettes at his establishment, which has live bands that often request to play in a smoke-free venue. Patrons haven’t complained much, and he’s had little trouble with the ban, Bell said.
But Byrd said the ban has caused major problems for members of his wait staff who feel uncomfortable telling patrons they can’t smoke on the patio, especially since waiters and waitresses often take hits on their tips when they tell customers to snuff their cigarettes.
“All we get is negative feedback,” he said.
Byrd said while he has no plans to return ashtrays to The Spot’s patio, he is considering letting smokers light up on the patio and instructing his staff to pick up the cigarette butts off the ground.
“I think we’re following suit with everyone else,” he said.
 The outdoor ban largely has been ignored since the ban went into effect. Although smokers can’t light up within 15 feet of businesses’ front doors or open windows, smokers have been puffing away on the sidewalks along The Strand and Postoffice Street, and on decks and patios throughout Galveston since Jan. 1.
The police have said it is not a priority to enforce the smoking ban. They said they will respond to complaints, but they have to witness a person smoking in an area where smoking is banned to issue a ticket.
The offense is a class C misdemeanor — the equivalent of a traffic ticket — and comes with a $100 fine, unless the violation was done “intentionally, knowingly or recklessly,” which in that case, could come with a fine of up to $2,000.
The ordinance allows the city to ticket a person who owns, operates or controls a public place that fails to comply with the smoking ban. The offense comes with a $200 fine for the first violation, a $400 fine for a second violation and a $500 fine for each additional violation.
However, city spokeswoman Alicia Cahill said police have no plans to ticket the owners of establishments that allow smoking in banned areas.
Bar and restaurant owners have complained about the ordinance, which they said will harm already struggling island businesses.
They repeatedly have asked city council members to amend the ban to allow smoking on decks and patios. Council members on Dec. 10 amended the ordinance to allow smoking in stores specializing in tobacco products. That amendment benefits only Havana Alley Cigar Shop and Lounge, 415 21st St.
However, council members, fearing they were giving the shop an undue advantage, prohibited the shop from allowing its patrons to sip beer, wine and liquor inside the store. The shop also must install a ventilation system and ban anyone younger than 18 years old.
Unlike Galveston, Houston bars and restaurants are overwhelmingly complying with the city’s smoking ban, which went into effect in 2007, Rene Zamore, executive director of the Greater Houston Restaurant Association, said. That’s likely because Houston still allows smokers to light up in outdoor areas, such as decks and patios, she said.
“Restaurants and bars are loving the opportunity that they have an option,” she said. “That really has helped save them from a lot of angst.”
This is a sponsored guest post written by a Press Release on behalf of PBM Products. Post powered by Sponzai.
GORDONSVILLE, VA., December 2 , 2009—PBM Products, LLC, a leading infant formula company that supplies store-brand infant formulas to Walmart, Sam’s Club, Target, Kroger, Walgreens, and other retailers, has received a favorable jury verdict and a $13.5 million damages award in its false advertising lawsuit against Mead Johnson & Co., the operating subsidiary of Mead Johnson Nutrition Company (NYSE: MJN) (“Mead Johnson”), the makers of the national-brand Enfamil® LIPIL® Infant Formula. Mead Johnson is 83 percent-owned by Bristol-Myers Squibb.
PBM’s lawsuit claimed that Mead Johnson engaged in false and misleading campaigns against PBM’s competing store-brand of infant formulas, suggesting they do not provide the same nutrition as Mead Johnson’s brands. PBM’s store-brand infant formulas cost up to 50 percent less than Enfamil® LIPIL®. The $13.5 million in damages awarded by the jury in the United States District Court for the Eastern District of Virginia is one of the largest damages awards ever for a false advertising case.
“This decision by a jury of the people confirms that Mead Johnson’s ads have been false in suggesting that there is a nutritional difference between our store-brand formula products and their products, when in fact the only major difference is price,” said PBM CEO Paul B. Manning. “Despite Mead Johnson’s scare tactics, parents are assured that PBM’s formula products are as high quality and nutritious as Mead Johnson’s.”
U.S. District Court Judge James R. Spencer issued his written rulings yesterday following the November 10th jury verdict. Judge Spencer’s written rulings permanently enjoined Mead Johnson from making any false statements concerning PBM’s infant formula, including the claims Mead Johnson previously made in Enfamil advertising that "It may be tempting to try a less expensive store brand, but only Enfamil LIPIL is clinically proven to improve brain and eye development," and "there are plenty of other ways to save on baby expenses without cutting back on nutrition." The Court also ordered Mead Johnson to retrieve from the public domain all advertising or promotional materials containing these or any other false claims about PBM’s store brand infant formula.
The details of the decision and the complaint are posted online in full at:
· http://www.pbmproducts.com/docs/Order_Laches.pdf
· http://www.pbmproducts.com/docs/PBM_Complaint_MJ_III_LIPIL.pdf
The nutritional supplements under examination in the case are two fats, DHA (docosahexaenoic acid) and ARA (arachidonic acid), which Mead Johnson calls “LIPIL®” solely for marketing purposes and touts as promoting infant brain and eye development. PBM’s claim focused on Mead Johnson’s direct mailing to more than 1.6 million parents of an alarming blurry picture of a child’s cartoon duck next to a clear picture of the same image which suggested that anything other than the Enfamil LIPIL® blend of ingredients is inferior and will result in poor eye and brain development. Other parts of the false advertising campaign consist of statements that only Enfamil LIPIL has been proven to confer visual and mental benefits on infants, and store-brand formulas are a “cut-back in nutrition” compared to Enfamil.
PBM successfully argued that these advertisements were false and misleading especially since PBM store- brand infant formulas have the same nutrients at the same levels as Enfamil. PBM infant formulas are formulated to contain DHA and ARA, and are sourced from the same supplier in amounts which equal or exceed the DHA and ARA in Mead Johnson’s Enfamil LIPIL®.
This decision marks the third time PBM Products has sued Mead Johnson for false advertising claims. On the prior occasions Mead Johnson admitted that it made false claims about PBM’s products. It is also the first false advertising case to focus on the issue of DHA and ARA nutritional ingredients in formula, which were introduced into the market in 2003 and have become a staple in recent years by many brands as key components for infant development.
“This jury verdict should send a significant and clear message to Mead Johnson about the way it conducts marketing and advertising for its brands,” said Manning. “This lawsuit also demonstrates our complete commitment to defending our products and the valuable brands of our retail partners.”
“As a parent and supporter of children’s medical research, I take a personal responsibility in assuring our customers that the products we produce are healthy and nutritionally equivalent to brand names like Enfamil® LIPIL®. It is important, especially now, for parents to know that there are lower priced yet highly nutritious store-brand formulas that will provide the same benefit to their children as any national brand name formula product,” Manning added.
The U.S. infant formula market is estimated at $3.4 billion and the global market is estimated at $7.9 billion.
All of PBM’s formulas, and for that matter all of U.S. infant formulas, are subject to the exacting standards of the U.S. Food and Drug Administration (FDA), pursuant to the Infant Formula Act of 1980. This legislation vested FDA with the authority to ensure that all infant formula products sold in the United States provide the necessary levels of identified nutrients required for the growth of healthy babies. For more information, visit this FDA link.
PBM Products was represented by the law firm Kramer Levin Naftalis & Frankel LLP. Partners from the firm’s advertising practice, Harold P. Weinberger and Jonathan M. Wagner in New York, led the team.
About PBM
PBM is privately owned and based in Gordonsville, VA. PBM companies specialize in manufacturing, distributing, and marketing consumer food, nutritional, and pharmaceutical products. For more information, visit www.pbmproducts.com.
Enfamil® LIPIL® are registered trademarks of Mead Johnson & Co.
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