Why this matters
Card deposits may be reduced by merchant fees, refunds and paid-out tips. Employee-reported tips affect payroll tax calculations. Larger food or beverage establishments may also have Form 8027 reporting duties.
Example
A $10,000 POS sales report may settle to a lower bank deposit after fees and refunds. The difference needs a clear reconciliation; it is not automatically missing revenue.
What to review
Review taxable sales categories, tip pooling, service charges, payroll reports, inventory and deposit timing.
Official source: www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting