Per Thomas's quote: If they are audited, they will be required to report their tips as income and pay their tax. Unless something has changed in the last few years, the IRS would systematically assume the server earned 10% of the revenues he/she served that day in tips.
I waited tables a few years ago, and here's the gist:
If you dont want to be audited, each night you must also claim -at the very least- the amount left to you in credit card tips (less tip share in restaurants where you must pay out a percentage of sales to bartender, host and bussers).
The IRS can tell very quickly that you are lying if your credit card tips average $50 a night, yet you claim $25
Now my 2 cents regarding tipping:
Tipping a service person upfront means many things to many different people. To some it is insulting and means I am a tightwad making a big show for my date. Do expect me to sneak away and take your daily tip off my tab. To others it means, I am going to be demanding, and this $10 means I expect you to bend over backwards at my whim. Then of course, there are those who think you are lovely and generous and appreciate all of the work service people do in front of and behind the scenes.
About people not being, "thankful" enough for tips: After a long hard cruise, I bet these people are pooped and ready to go home. They may have whooped and hollered when getting your generous tip, but as time passed got back into the grind. I never tip FOR the thank you, I tip AS the thank you.
On a funny note, when waiting tables, a fairly common occurence was for someone to pay with cash and loudly exclaim, "Keep the change!!". If that happened, that just gives us fairwarning to hustle back and check out the damage. On $200 charge, sometimes you would get like a $2 tip. In these instances, I ALWAYS went back to the table, and with my biggest smile exclaimed, "Here's your change!" whilst placing the singles in front of the bill payer. I would say nearly 100% of the time the person would leave a better tip.