NRA lobbies for immigration reform, funds battle against IRS tip audits

March 19, 2002

WASHINGTON, D.C. -- The National Restaurant Association took a prominent stand during the National Immigration Forum's annual conference Feb. 1, lobbying Congress and the Bush Administration for immigration reforms it believes will ease the foodservice industry's labor shortage.

Speaking at the forum, Lee Culpepper, NRA senior vice president of government affairs and public policy, stated that the industry is the nation's largest private-sector of employer of immigrants --1.4 million of them -- and that relaxing laws regarding immigrant employment will help staff the industry.

"We are encouraged by the reassurances of President Bush and the President of Mexico, Vicente Fox ... discussions concerning ... initiatives like immigration reform and worker shortages, will continue," Culpepper said.

Last December both Bush and Fox said spoke favorably about proposed guest-worker programs.

According to the NRA, the restaurant industry created 101,000 jobs in 2001, or approximately 22 percent of all jobs created in the overall economy. It is expected that the industry will create 1.4 million new jobs by 2010.

* In other NRA news, the association announced it is contributing $100,000 from the Safe American Free Enterprise Fund to help one small businessman, California restaurateur Bob Larive, continue his battle against the IRS before the U.S. Supreme Court.

At issue is whether the IRS can assess employers a tax bill for their share of FICA taxes on tips it says employees didn't report. Currently, the IRS has no standard means of determining the exact amount of the supposed tips or which employees failed to report them. A ruling on the case, due in June, could affect the tip reporting practices at more than 200,000 restaurants.

"It is our hope that the (Supreme Court) will agree that the IRS lacks authority to present the employer with one huge tax bill for alleged underreported employee tip estimates rather than making an appropriate determination based on an exact amount," said Peter Kilgore, the NRA's senior vice president of operations and general counsel.

The Supreme Court said in January that it will consider the case of Fior d'Italia, a San Francisco restaurant that has battled the IRS for five years over a payment of $23,262 it says is due for underreported tips. That high court's decision to hear the case follows a decision in the U.S. Court of Appeals for the Ninth Circuit that said the IRS could not target restaurants through "employer-only" audits and assessments to determine whether employees underreport tips.

The NRA has long maintained that holding only employers liable when workers fail to report tips turns them into "tip police."

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