National Taxpayers Union Foundation (NTUF) this week submitted a public comment calling on the IRS to make several modifications and clarifications to the agency’s proposed rule implementing the No Tax on Tips provision of the One Big Beautiful Bill Act—prominent among them, that the IRS should include certain stablecoins as “cash tips” under that rule.
In its comments, NTUF said the IRS’s current language defines cash tips to include “tokens exchangeable for a fixed amount of cash” but excluding “most digital assets,” which creates unnecessary confusion for taxpayers and businesses alike.
“Congress has already established a clear framework for dollar-backed stablecoins that meet strict reserve and redemption standards,” said NTUF President Pete Sepp and Policy Manager Deborah Jennings, who co-filed the comment. “If casino chips and vouchers qualify as cash equivalents, it makes no sense to exclude fully collateralized stablecoins that hold one-to-one U.S. dollar reserves.”
The organization also urged the IRS to explicitly clarify how the proposed rule applies to digital content creators who receive tips through streaming platforms, social media, or payment applications. As millions of Americans now earn income through platforms that allow followers to “tip” or send voluntary contributions, ambiguity in the rule could lead to inconsistent or unfair treatment for taxpayers.
Also needed is further transparency in how tipped occupations will be classified under the proposed Treasury Tipped Occupation Code (TTOC) system. While NTUF supports the creation of a standardized list of occupations that “customarily and regularly” receive tips, it noted that the rule leaves open important questions about how those determinations will be made.
The proposed rule, for example, lists shampoo assistants under TTOC 604 but does not address similar support roles such as apprentices, helpers, or unlicensed assistants.
“We recommend that the IRS publish clear guidance describing how such positions will be evaluated to ensure consistent treatment across industries,” Sepp and Jennings said.
The comments also call on the IRS to include clarity about whether foreign-sourced tips or tips paid in foreign currency qualify for No Tax on Tips.
“U.S. taxpayers working abroad or receiving tips in other currencies need definitive guidance,” Sepp and Jennings said. “Doing so will save future compliance costs for taxpayers and budgetary costs for the IRS.”