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Tips for restaurants on the IRS automatic gratuity rule

This op/ed was contributed by Jordan R. Bernstein, an associate at Michelman & Robinson and a member of its Hospitality Law Group. This article does not necessarily reflect the opinions of the editors and management of Nation’s Restaurant News.


Full-service restaurants have long been comfortable applying automatic gratuities to their customer checks, especially for parties of six or more. A new ruling by the Internal Revenue Service  which takes effect this month  is likely to spell the death knell for automatic gratuity policies. Are you ready for the new policy? 

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