I have a feeling this will bee based on what the IRS thinks those tips are, not reality.
A case in point. I knew a number of people who worked in Charitable Gaming here in ND as blackjack dealers, on $2 limit tables for one of many charitable organizations. They were paid minimum wage plus tips. The one charity relentlessly tracked dealers' tips, and required them to be in the form of chips, which were then tracked. While the employee got their tips in cash at the end of their shift, that amount was added in to their gross pay for tax purposes. Many worked part-time or as a second job to bring in extra money.
In swooped the IRS, demanding the employees entire paychecks be withheld because they were obviously under reporting their tips.
After all, Blackjack dealers in Las Vegas made multiples of what was being claimed for tips by charity dealers in ND.
Only the fact that charities (especially that one charity) accounting of tip amounts existed for individual dealers, and for the sites that charity had across the state, enabled the dealers to get paid for their hours without waiting for their tax refunds.
At the time the tips did not usually exceed the wages, as they were often bet with the player's bet on a hand--if the hand won, the dealer's tip won, too, if not, the house took both.More than one dealer lamented that they seemingly couldn't lose those hands, and as a consequence the tip bet went to the house.
But that didn't stop the IRS from trying.
Of course, they will descend on those least able to afford a tax lawyer or accountants to help them out, seeking summary judgements against the defenseless, and preying on those least able to defend themselves. That leaves the $400K and up crowd out.