Important Change for 1999 Photographs of missing children.   The Internal Rev- enue Service is a proud partner with the National Cen- ter for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1–800–THE–LOST (1–800–843–5678) if you recognize a child. Introduction This publication is for employees who receive tips from customers. If you are self-employed and receive tip in- come, see Publication 334, Tax Guide for Small Busi- ness, for more information. All tips you receive are income and are subject to federal income tax. You must include in gross income all tips you receive directly from customers, tips from charge customers that are paid to you by your em- ployer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. The value of noncash tips, such as tickets, passes, or other items of value are also income and subject to tax. Reporting your tip income correctly is not difficult. You must do three things. 1) Keep a daily tip record. 2) Report tips to your employer. 3) Report all your tips on your income tax return. This publication will show you how to do these three things, and what to do on your tax return if you have not done the first two.    This publication will also show you how to treat allocated tips. Keeping a Daily Tip Record Why keep a daily tip record?   You must keep a daily tip record so you can: • Report your tips accurately to your employer, • Report your tips accurately on your tax return, and • Prove your tip income if your return is ever ques- tioned. How to keep a daily tip record.    There are two ways to keep a daily tip record. You can either: 1) Write information about your tips in a tip diary, or 2) Keep copies of documents that show your tips, such as restaurant bills and credit card charge slips. Department of the Treasury Internal Revenue Service Publication 531 Cat. No. 15059V Reporting Tip Income For use in preparing 1999  Returns