Would a rose smell as sweet if you called it a stench blossom?
Excerpt on gifts from
an LBMC article : The payment must be in the nature of “something for nothing.”
It is not a gift if the payment is a reward for services rendered.
With regard to payments made by an individual to a service provider, it is difficult to argue that such payments constitute gifts, even when the amounts are paid at the holidays.
You can pretend it's a gift, but if you got it at your place of work after performing a service for the patron, it's a tip.
money.stackexchange.com/users/52448/Hart CO
Q: If I call a tail a leg, then how many legs does a dog have?
A: 4.
You can call it whatever you want, it's still a tail.
The scenario is nonsense.
There is a quid pro quo, the waitress served the customer and he tipped her.
A $7 tip on a $24.47 check.
He was generous, but misguided if he thought that this note would let the tip go untaxed.
And even though the article you link is fresh, the author has the gift threshold incorrect.
This year it's $14,000, and has been so since 2013.
A cute story, and unlikely to be an issue for $7, but the IRS would take notice if this idea gained any traction.
Two references -
If Gifts Are Not Income, Why Tax Gratuities?
From the Tax Court Files
: Is That Money a Gift or Income?
money.stackexchange.com/users/187/JTP - Apologise to Monica
I worked in the service industry for over 10 years and this came up every now and again.
Mostly in hypothetical situations.
I'm not a tax expert, but my general understanding is that it is viewed as income by the IRS if you performed a service of any kind in exchange for the money.
In other words, if you waited on the table, and they left you a gift for doing so, it is taxable.
You'll probably also find that if you pool tips with other employees or have to tip out the bartenders, cooks or dishwashers, they'll generally agree with the IRS that you clearly received a tip and want their fair share.
While the concept of "gifting" money to others in a situation like this is intriguing, especially in the service industry, it really doesn't meet the definition of a gift in the eyes of the IRS.
For it to truly be a gift, the person would have had to intend to gift you the money even if they hadn't come into your restaurant at all that night.
That clearly is not the case here.
money.stackexchange.com/users/55530/Keith
Here's my obligatory contrarian answer...
No, the way the note was written, it wouldn't stand up to IRS scrutiny.
Libertarians need to get a little more creative if they want to skirt the laws and make up a credible story about why it is a gift: Thanks for chatting with me at dinner tonight, I feel like we're becoming fast friends.
I'm sorry you weren't able to sit down and eat with me, so here are a few bucks to buy you dinner/dessert when your shift ends.
It's not a tip; your service was lousy!
I'm still doubtful that this would stand up to scrutiny, but unlike the note that was left in the picture, it actually does have a chance.
money.stackexchange.com/users/12089/NL - Apologize to Monica
Imagine two restaurants.
One has prices 15% higher than the other, and the owner pays this 15% to his wait staff in the form of higher wages.
The other has lower prices, but the average customer gifts 15% to their waiter.
Clearly, in the first restaurant, the 15% the wait staff receives is taxable income.
It is traditional salary.
What legitimate, economic justification is their for treating the second restaurant any differently?
Imagine a grocery store in a small town that offered long-time customers a "pay nothing" option but made it clear that they'd be subject to social ostracism and no longer welcome in the store if they didn't gift 85% of the usual cost of the items.
The customers would save on sales tax and the grocer would argue that all that money was gifts, not income.
Of course this doesn't work.
The IRS, and the laws, don't care very much about what you call things.
They care about the underlying economic reality.
If the money was part of the payment for the services rendered, regardless of how it was delivered, what the parties called it, or whether the obligation to pay was legal or social, it's still a payment for the service and it's still taxable.
You would have to be able to argue to the IRS that it really was a gift and wasn't any form of payment for the service received.
Otherwise, it's just a scheme to evade taxes.
money.stackexchange.com/users/4548/David Schwartz
One way to possibly disambiguate it from a tip is to receive it outside of your service context.
If there really is a relationship, and they want to show appreciation or help you out financially, the "gift" could be given outside of the restaurant.
Otherwise, I agree that it seems like tax evasion.
The purpose of the money was to compensate for services rendered, which is income, not a gift.
If it's just a random stranger, then I'd have a hard time arguing that the purpose was pure altruism versus socially-mandated tipping.
Why can't I just have my employer just give me a "gift" every Christmas instead of a bonus?
Or just reduce by salary by $18k and give me a $1,500 "gift" every month?
money.stackexchange.com/users/5363/D Stanley
As a waiter/waitress, if I received money from a customer and he/she specifically said that this is  not  a tip, but a gift , do I need to report it at the end of the night to the restaurant? Do I need to report it on my tax return?   According to the article "An Internal Revenue Service (IRS) spokesperson conceded that he'd never heard of such a situation..."
Reporting monetary gifts as a waiter/waitress?
money.stackexchange.com
<united-states><taxes><gifts>
money.stackexchange.com/questions/78978
money.stackexchange.com/users/52076/Michael
It is difficult to argue that this constitutes a gift if it was a reward for services, especially as it was at your place of work. It is  not a gift if the payment is a reward for services rendered and it is  difficult to argue that such payments constitute gifts. If you received it at your place of work after performing a service, for example waiting on the table, it is classed as a tip and subsequently taxable. You may also find that if you pool tips with other employees, they may argue that you clearly received a tip and want their fair share. For it to truly be classed as a gift, the person would have had to intend to gift you the money even if they hadn't come into your restaurant at all that night and you will need to be able to argue that it wasn't any form of payment for the service received. One way to remove doubt would be to receive it outside of your service context.  
It is  not a gift if the payment is a reward for services rendered and it is  difficult to argue that such payments constitute gifts. If you received it at your place of work after performing a service, for example waiting on the table, it is classed as a tip and subsequently taxable. You may also find that if you pool tips with other employees, they may argue that you clearly received a tip and want their fair share.   For it to truly be classed as a gift, the person would have had to intend to gift you the money even if they hadn't come into your restaurant at all that night and you will need to be able to argue that it wasn't any form of payment for the service received. One way to remove doubt would be to receive it outside of your service context.  