Restaurant Tax Issues

Restaurant Tax Issues


Are the proper people classified as employees. Are the wages properly recorded? Are the payroll taxes being paid on time? Are the tips properly reported? There is little lenience for unpaid payroll taxes.

Labor issues

Managing people that are 30 years old and younger. Some restaurants have a high rate of turn over.


What are the food costs  Are the employees taking the Food without authorization?

Sales tax issues

are matters that involve the state or states in which you operate

Business property tax are issues

They concern the county in which you operate


Is the restaurant profitable?. Is the landlord the culprit in preventing the business operator from earning a profit?

The books and records

How are the books and records maintained? Is there a manual system or a computerized system?

Depreciation methods

: there are many benefits available to restaurant owners to receive favored depreciation of capital expenditures and improvements.

Methods of Accounting

A restaurant normally chooses the cash method, accrual method or hybrid method of accounting

Choice of Entity

Bars and restaurants can operate as a sole-proprietorships, partnerships, subchapter C corporations, subchapter S corporations, or Limited Liability Companies (LLC).


  • The IRS maintains a list of 101 ways to steal from a restaurant
  • Tips vs Service Charge
  • Identity theft

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You need to be properly represented

  • Office audit
  • Field audits
  • Appeals of auditors findings
  • Criminal Investigations
  • Civil Litigation
  • Criminal Litigation

IRS audits focus on basic income and employment tax issues


The bar and restaurant industry is particularly susceptible to theft and embezzlement


Bar or restaurant employees may underreport income by concealing cash receipts or underreporting tips


Forms 8027:. Employer Annual Information Return of Tip Income and Allocated Tips

Other Tax Related Issues

  • Financial Planning Issues
  • Estate Planning Issues
  • Retirement Planning Issues
  • Health Department
  • Liquor License issues
  • Rights to Representation
  • Proper legal protection
  • Liability Insurance
  • Product liability issues
  • Sexual Harassment cares and concerns