Management tampered with tips reported, employess can't clock in

[Jill143]

My husband worked for a restaurant where the servers very rarely clocked in. They also never reported tips. They were encouraged not to clock in, and would be taken off the schedule if they were showing to many hours, were not even talking overtime here. They also had no formal tip reporting in place, and only in the last final few weeks he worked here did he ever report any tips. (at the time he was leaving, management finally started requiring this) This place was always a chaotic disaster.

He occasionally received paychecks which were always zero.

Now we received his W-2 and we owe $1,300 in taxes for high total tips reported and barely any hourly wage paid.

He definitely didn't report the amount showing on the W-2... Management must have calculated it themself, we have no idea...

During the time he worked there the company was bought under a new name. This didn't take place until the end of his term.

Also, During the end of the year they were given $100 check for compensation for some "mistake" they made.

I can't make heads or tails of this mess. I want to call corporate office but I don't even know where to start. Originally I thought there was just an error in the W-2, but now looking further I see there was a lot more going on. I know they were doing illegal things, and I don't assume the restaurant would fix this without legal action... Does anyone have any insight on this?
I'm wishing there was some kind of quick fix for NOW and us having to get the taxes in... If I report this to the IRS and they audit them then what? Do I pay these taxes and hope for some recourse later?
Would some kind of wage audit fix our tax problems? Would that prove they owed him a lot of wages? Would some of the taxes owed be the restaurants responsibility since the wages would have been gradually paying the tax on the tips?

Does anyone have any insight on this??

[aryels]

'My husband worked for a restaurant where the servers very rarely clocked in.' 'He occasionally received paychecks which were always zero.'

...and when did you first notice something unusual??

[Jill143]

It's common to get zero paychecks when serving... Because they are taking taxes out and at $3.13 an hour paychecks rarely amount to anything.

There's no doubt that hubby was naive... but now I'm just getting into the details... I never knew all this until now as I attempt to take care of our taxes.

[Jill143]

Dividing the wages paid by his $3.13 salary, I saw that they only paid him for an estimated 70 hours. He was working over 40 hours a week for 8 months.

If this was actually the hours he worked then the tips he received hourly would be over $60 an hour.

and that is certainly off, this place was a dump they rarely made more than $10 an hour.

He's young and naive, i was clueless, i just thought I could get some friendly help or advice on here.

[aryels]

"Now we received his W-2 ..."

okay, employers are required to provide the W-2 by the end of January 31, and now it is the month of May. The tax season ended on April 17th.

[Jill143]

Well WOW,

Thanks again for the helpful insight!!

[aryels]

Unfortunately, unless someone was keeping accurate records, there is no way of proving that the husband was actually working at the restaurant.
(My first suspicion would be that husband is feeding the wife a line of crap.)

Thus there wouldn't be any way of proving that the restaurant owes him any money.

Anyway, here is a link which better explains the tip-reporting and taxation issues.

http://www.restaurant.org/legal/tips/basics.cfm