Employer's Annual Information Return of Tip Income in Spokane, Washington (2026)
Your federal tax compliance is incomplete, risking IRS penalties and FICA tax imbalances, without the Employer's Annual Information Return of Tip Income—the official Form 8027 you must file for your Spokane, Washington establishment. This mandatory report, issued by the Internal Revenue Service (IRS), is often called an FICA tip allocation report. Key facts:
- 48 fields — ApronPrep auto-fills 40
- $0–$0 government filing fees
- Varies annual processing timeline
Most applicants complete this in under 15 minutes with ApronPrep, which auto-fills 40 of 48 fields.
Analyzed from Employer's Annual Information Return of Tip Income
83% from one compliance interview
Manual entry or document upload required
Why You Need a Employer's Annual Information Return of Tip Income
The Employer's Annual Information Return of Tip Income (IRS Form 8027) is mandated by federal law under the Internal Revenue Code (Title 26). This requirement applies nationwide, including to restaurants in Spokane, Washington. The form's purpose is to report your establishment's total food and beverage sales, total charge receipts, and the tips reported by your employees, ensuring all tip income is properly accounted for for federal tax purposes. The IRS uses this data to verify that employees are accurately reporting their tips and that employers are fulfilling their withholding and reporting obligations.
Failing to file an accurate and timely Form 8027 triggers significant federal penalties, which are enforced regardless of your location in Spokane. Consequences include:
- Failure-to-file penalties: A penalty of 5% of the unpaid tax for each month the return is late, up to a maximum of 25%.
- Failure-to-pay penalties: An additional 0.5% per month on any unpaid tax amount related to the reported information.
- Accrued interest on all unpaid penalties and taxes from the due date.
- Risk of audit and potential criminal prosecution for fraud or tax evasion if willful neglect or falsification is found.
- Operational disruption from an IRS audit, which can freeze business accounts and create significant administrative burden.
Legal code: Internal Revenue Code (Title 26)
Recent update: For the 2026 tax year, the IRS has updated the electronic filing thresholds and specifications for Form 8027; employers required to file 10 or more information returns must now file Form 8027 electronically.
Who Needs a Employer's Annual Information Return of Tip Income?
| Type | Required | Notes |
|---|---|---|
| Restaurant (Full-Service) | Required | Required because you have tipped employees, making you subject to IRS reporting rules under the Tax Equity and Fiscal Responsibility Act (TEFRA). |
| Bar / Nightclub | Required | Required as bartenders and servers are typically tipped, triggering the mandate to file Form 8027 if food sales exceed 10% of total sales. |
| Food Truck | Not Required | Not typically required because most operators do not employ tipped staff in a manner that meets the large food or beverage establishment threshold for mandatory reporting. |
| Coffee Shop / Café | Not Required | Not typically required as tipping is often occasional or via a communal jar, not meeting the IRS definition of a 'tipped employee' requiring formal allocation reporting. |
See which restaurant types need this requirement — and which don't.
See Full Requirements →Field-by-Field Guide (48 Fields)
40 of 48 auto-filledAmended Return
checkboxCheck this box only if you are correcting a previously filed IRS Form 8027, indicating this is an amended return for the same calendar year.
COMMON MISTAKE: Checking this box when filing an original annual return, which will flag your filing incorrectly and likely cause rejection or processing delays.
Final Return
checkboxCheck this box only if your food or beverage establishment permanently ceased operations and you are filing the last Form 8027 for the final year in business.
COMMON MISTAKE: Checking this box for a business that is still operational, which incorrectly signals closure to the IRS and can trigger compliance follow-ups.
Type: Alcoholic Beverages
checkboxSelect if your establishment’s primary tip-producing activity is the service of alcoholic beverages (e.g., a bar, tavern, or establishment where beverage sales exceed 50% of food/beverage sales).
COMMON MISTAKE: Checking this and another establishment type box, which is invalid; you must select exactly one classification that best describes your primary business.
Type: Meals Other Than Evening
checkboxSelect if your establishment primarily serves meals other than evening meals (e.g., breakfast, lunch, brunch) and tipping is customary for those services.
COMMON MISTAKE: Selecting multiple establishment types; the IRS requires a single selection that most accurately reflects your primary source of tipped income.
Type: Evening and Other Meals
checkboxSelect if your establishment serves both evening meals and other meals (like lunch) where tipping is customary for food service.
COMMON MISTAKE: Confusing this with 'Evening Meals Only'; this category is for establishments with mixed meal service throughout the day.
Type: Evening Meals Only
checkboxSelect if your establishment exclusively serves evening meals (e.g., dinner service) where tipping is customary.
COMMON MISTAKE: Selecting this if you serve any lunch or brunch service, which would require selecting 'Evening and Other Meals' instead.
Accepts Credit Cards: Yes
checkboxCheck 'Yes' if your establishment accepted credit or debit card payments for food and beverages during the reporting year, as this affects tip allocation reporting.
COMMON MISTAKE: Leaving both 'Yes' and 'No' blank, which is a common reason for IRS correspondence requesting clarification and delaying processing.
Accepts Credit Cards: No
checkboxCheck 'No' only if your establishment did not accept any credit or debit card payments for food and beverages during the entire reporting year.
COMMON MISTAKE: Checking 'No' when you accept cards, which misrepresents your payment methods and can trigger an IRS review of your reported tip allocations.
Line 7c: Allocation Method - Good Faith Agreement
checkboxCheck this box if you used a written, good-faith agreement between employer and employees to allocate tips, as permitted under IRS rules for reporting allocated tips.
COMMON MISTAKE: Selecting this method without having a documented, signed agreement in place, which does not meet IRS requirements and can invalidate your allocation.
Line 7b: Allocation Method - Gross Receipts
checkboxCheck this box if you used the gross receipts method (detailed in IRS Publication 1244) to allocate tips among employees for reporting purposes.
COMMON MISTAKE: Incorrectly calculating the gross receipts ratio or checking this box when you used a different method, leading to discrepancies the IRS will flag.
ApronPrep auto-fills 40 of 48 fields from a single compliance interview — no re-typing, no guessing what the government expects.
Top 5 Employer's Annual Information Return of Tip Income Mistakes
1. Filing Form 8027 Late or to the Wrong Agency
Mistakenly mailing Form 8027 to the Washington State Department of Revenue or filing after the February 28 deadline. This mistake triggers an automatic IRS penalty of $50 per return, per month (up to $270), and can delay the processing of other tax documents. Always file electronically via the IRS FIRE System or mail the paper form to the IRS Ogden, UT address listed in the instructions by the deadline.
2. Incorrectly Reporting Gross Receipts and Charged Tips
Entering total sales without excluding non-food/beverage revenue or miscalculating charged tips (credit/debit card tips). Discrepancies between gross receipts and charged tips raise red flags for IRS matching programs. Example: Including retail merchandise sales in 'gross receipts' or failing to back out service charges from 'charged tips' will cause a mismatch and likely generate an IRS notice, adding weeks to resolve.
3. Mismatching Employee Tip Data with W-2s
Reporting tip allocations or employee tip income on Form 8027 that does not match the amounts reported in Box 1 (Tips) and Box 7 (Allocated tips) on employees' W-2 forms. This is a primary audit trigger. The IRS automatically cross-references these forms; even a small discrepancy for one employee can result in a notice to the employer and corrected W-2 filings, causing significant administrative delays.
Skip the Paperwork on Your Employer's Annual Information Return of Tip Income
ApronPrep auto-fills 40 of 48 fields from one compliance interview.
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Employer's Annual Information Return of Tip Income by City in Washington
| City | Fee Range | Timeline |
|---|---|---|
| Seattle | ||
| Spokane | ||
| Tacoma |
Process & Timeline for IRS Form 8027
Gather & Reconcile Employee Tip Data
Collect all tip records for the tax year, including cash and credit card tips reported by employees on Forms 4070A, credit card transaction summaries, and any allocation reports. You must reconcile this data against gross food and beverage sales. This step is critical; missing allocations or mathematical errors are common audit triggers for the IRS. Prepare to allocate tips if total reported tips are less than 8% of your gross receipts.
Prepare IRS Form 8027 and Employer's Annual Return of Tip Income
Complete the 3-page Form 8027, transferring reconciled totals from your records to the specific lines for gross receipts, charged tips, and reported tips. ApronPrep auto-fills repetitive business information. Ensure you use the correct Employer Identification Number (EIN) for your Spokane location. The most common error is transposing numbers between the four separate data fields for gross receipts and tips.
File with the IRS by February 28th
Submit your completed Form 8027 to the IRS by the mandatory deadline of February 28th (or the last day of February if it falls on a weekend/holiday) for the preceding calendar year. Filing is done by mail to the IRS address listed in the instructions; there is no e-file option for this specific form. Include a copy for your records. Missing the deadline incurs a penalty of $50 per form, per month, up to a maximum of $250.
Other Requirements You'll Need
This is one of 13 requirements for opening a restaurant in Washington.
ADA Compliance Self-Certification
federal
Alarm System Permit/Registration
local
Annual Report Filing
state
Application for Employer Identification Number
federal
See all co-required forms and how they connect to your compliance dossier.
See All RequirementsProcessing timelines for the Form 8027, submitted to the IRS, can vary significantly depending on the agency's review workload and if your filing triggers an audit. There is no standard approval window issued by the IRS, and you should allow several weeks to months for the agency to fully process the information. Contact the IRS or your tax professional for guidance on specific cases.
There is no government filing fee to submit Form 8027 to the IRS. This is an informational tax return used for reporting purposes, not an application for a permit or license. Not legal advice — verify with the IRS.
No, the Form 8027 is not a transferable permit. It is an annual tax report tied to your specific Employer Identification Number (EIN) and the establishment it covers. If you move your business, you must file a new report for the new location under your existing EIN, and you should also update your business address with the IRS and for related local permits like a City Business License/Registration.
This is an annual requirement. Form 8027 must be filed with the IRS by the last day of February each year, reporting tip income data from the previous calendar year. It's part of your ongoing federal tax compliance, similar to other annual filings like the Annual Report Filing required by the Washington Secretary of State.
There is typically no physical 'inspection' for Form 8027. Compliance is verified through the IRS's audit process, where they review your submitted records for accuracy against payroll data, credit card receipts, and employee tip reports. Maintaining meticulous records, as you would for other compliance areas like Building Permit final inspections, is crucial to substantiate the figures on your return.
About This Data
This guide is generated from ApronPrep's compliance dossier system, which uses 53 parallel AI authority experts to discover requirements, then downloads actual forms and generates field-level intelligence for each one.
For Washington specifically, we have analyzed compliance dossiers for 3 cities (Seattle, Spokane, Tacoma), generating Rich FILs (Form Intelligence Layers) with 48 form fields analyzed for this requirement. Fee data is sourced from actual county department fee schedules, not estimates.
Our data is verified against official government sources and updated when regulatory changes are detected. If you find an error, please report it — accuracy is our core commitment.
Sources
- Internal Revenue Code (Title 26)
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