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Валгрин Ко. Message Board

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  • robbsbeach robbsbeach Aug 2, 2010 11:25 AM Flag

    Flu Shots

    Some taxpayers may claim income deferral based on § 1.451-5 as a defense when an examiner raises a gift card/certificate issue. For tax purposes, the general rule is gift card/certificate income is recognized when the gift card/certificate is sold. For financial purposes, gift card/certificate sales are income when redeemed. Recently, with the huge increase in gift card sales this issue has grown in significance. A taxpayer may not have paid close attention to the difference between book and tax accounting. Sometimes a taxpayer will state that they were not aware that the information schedule is required to be attached to its tax return. It is difficult to understand how a taxpayer would be familiar with the deferral provisions of § 1.451-5, without also being aware of its reporting requirements

    Same question on accounts recievable.