Former President Donald Trump called Vice President Kamala Harris a “copycat” because she advocated for the elimination of tip taxes.

Trump said Harris’ stance contradicted her voting record.

Trump promoted the elimination of the tip tax at a rally in Las Vegas on June 9. Harris also supported the idea on August 11. With more than 22 percent of Nevada’s workforce employed in the service and hospitality industries, the issue of the tip tax is of great interest in this battleground state.

On August 23, Trump said at a Las Vegas restaurant: “Kamala has voted with the tiebreaker to hire 87,000 new IRS agents to handle tips.”

Two days later, Trump released an ad titled, “Harris and Biden literally unleashed the IRS to harass employees who receive tips.” The ad shows a terrified homeowner as employees in suits arrive to search her home.

In August, we debunked a similar viral statement on Instagram about Harris and tip income. Harris cast the deciding vote on the Inflation Mitigation Act in August 2022, but the bill did not include a plan to send 87,000 agents after workers who received tips. And a 2023 IRS proposal to replace tip tax compliance programs was never implemented.

IRS plans to hire more employees, but not all in enforcement

The Inflation Reduction Act of 2022 raised taxes on large corporations and provided an additional $80 billion to the IRS.

The claim that the IRS would hire 87,000 IRS agents comes from a 2021 Treasury Department report that said the IRS would use the $80 billion from the Inflation Reduction Act to hire 86,852 full-time employees by 2031.

But not all of these jobs are enforcement-related.

In 2023, the IRS funded 13,661 positions, including 495 for enforcement, with Inflation Reduction Act funds.

From 2024 to 2030, the agency expects to hire about 32,500 additional enforcement staff.

In total, the IRS plans to hire approximately 53,000 employees from 2023 to 2030 across all offices, including enforcement, operations, and taxpayer services.

The agency has said it focuses enforcement of its tax laws on large corporations and wealthy taxpayers. The IRS said it has collected more than $1 billion from wealthy taxpayers who have delinquent taxes since the law was passed.

The Treasury Department had previously said tax audits would not increase for households earning less than $400,000. The median wage for waiters and waitresses is about $31,940, according to the Bureau of Labor Statistics – well below that limit.

The Trump campaign pointed to a March 2022 CBS report that found low-income households with annual incomes of less than $25,000 are more than five times more likely to be audited by the IRS than everyone else. The data comes from an analysis by Syracuse University’s Transactional Records Access Clearinghouse conducted before President Joe Biden signed the Inflation Reduction Act.

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Susan Long, co-director of TRAC and a professor of management statistics at Syracuse University, told us that the higher audit rates are because “the IRS is specifically targeting low-income families claiming an earned income tax credit—not anything directly related to tip income per se.”

IRS proposes new tip reporting program to replace existing programs

In February 2023, the IRS proposed a tip reporting program that would allow service industry employers to voluntarily report tips to improve tax compliance. The Service Industry Tip Compliance Agreement program aimed to leverage advances in point-of-sale systems, timekeeping systems, and electronic payment processing methods to improve tip reporting compliance.

The proposal was intended to replace three landfill compliance agreements that had been in place since 1993, but the agency never adopted it.

“The Treasury Department and the IRS have no plans to advance the voluntary program, and therefore there are no new reporting or compliance components,” said Treasury spokeswoman Ashley Schapitl. “We continue to carefully review the comments we receive in response to the proposed guidance.”

Erica York, an economist and research director at the Tax Foundation’s Center for Federal Tax Policy, said the Inflation Reduction Act did not change the tax treatment of tips.

“Tips have been reportable as income for decades,” York said in an email, citing a 1966 form that reminded taxpayers to include tips when reporting their income.

The Tax Equity and Fiscal Responsibility Act of 1982 “established stricter tip reporting rules to address underreporting,” York said. (York added, however, that this law was not the beginning of tip taxation.)

The IRS entered into agreements in the late 1990s and early 2000s for industries such as restaurants and casinos to improve the tax compliance of tipped employees and their employers through taxpayer education rather than tax audits.

A 2018 study by the U.S. Department of the Treasury’s Office of the Inspector General of Tax Administration found that 30% of employers with tipping arrangements filing tax returns for the 2016 tax year expected unreported tips totaling nearly $1.66 billion.

The Trump campaign team referred to newspaper articles and the report by the organization Americans for Tax Reform, which criticized the proposal to comply with the tipping regulations.

But York also told us, “The new program would not change the amount that tipped workers must pay.”

“To my knowledge, the proposed program has been in development for several years and may date back to this 2013 IRS proposal.”

Our verdict

Trump said Harris was “the deciding vote for hiring 87,000 new IRS agents to handle tip income.”

But his statement mixes and distorts two different policy proposals—one of which was never implemented—and presents Harris’ position in a misleading way.

In 2022, Harris voted in a runoff election for the Inflation Control Act, which provided $80 billion for the IRS. Although the Treasury Department had previously said the money would be used to hire about 87,000 workers, that was not just about enforcement. And the bill did not say the IRS would go after workers who receive tips.

The agency is hiring enforcement officers, but fewer than Trump said. In 2023, there were 13,661 IRS employees funded through the Anti-Inflation Act, including 495 for enforcement. From 2023 to 2030, the agency plans to hire about 32,500 enforcement employees under the act.

In 2023, the IRS proposed a new program that would allow service sector employers to voluntarily report tips to facilitate tax compliance, but the IRS has no plans to pursue this proposal.

We consider his statement to be false.