I have had a few servers come in with 1040 Line 21 adjustments to their income because of "tip outs", I have been recently asked if I can report his tips as gifts because there is a tax preparer that does that to other servers. My response was I can not do that for you but you are welcome to do your taxes were ever you'd like and I sent him on his marry way. Has anyone else ever encountered this? Is line 21 a place where you can put tips that were "over reported" by the employer? I'm asking for 4070 forms attached with the 4070a forms in order for me to make any adjustments. This has been a very gray area for me but the adjustments I have been making are on the actual W2 and inform clients of a letter and they should provide records when the IRS letter is received.