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Tax Treatment of Gift Card and Certificate Sales

presented by Lorman Education Services
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Summary

Tax Treatment of Gift Card and Certificate Sales

Workshop Description/Agenda

Benefits
Become versed in tax treatment of gift card and certificate sales. Tax treatment of advance payments has a colorful history in tax cases and IRS guidance. The proper treatment of gift card income and whether taxpayers can take advantage of income deferral provisions for gift revenue has received significant attention from both taxpayers and the IRS in recent years. There is exciting new guidance on gift cards and revenue recognition, allowing accrual method taxpayers to defer income from gift card sales to a year later than the year of receipt. The gift card market is influenced by the rise in demand for technologically advanced products, increase in need for cashless transactions, the surge in application areas among end users, the high adoption rate of smartphones, and growth associated with ecommerce. Total annual gift card volume increases 6 per annum on average and is projected to reach 170 billion in 2019. Since gift cards are being used in many ways, many questions arise regarding the proper treatment of gift card income, further complicated by considerations of when income should be recognized and whether income deferral provisions are applicable? Discuss and consider tax issues for gift cards. We will review IRS guidance addressing gift cards and taxpayer concerns, including when and whether an accounting method change may be used to change the timing of income recognition associated with gift cards.

Agenda
Review Income Recognition Rules, IRC ยง451 and Administrative Guidance That Allows Income Deferral for Advance Payments

History and Development of Primary Authority

Discuss Application of Advance Payment Guidance for Gift Cards

Review IRS Initiatives Designed to Address the Treatment of Advance Payments for Gift Card Income

Evaluate IRS Guidance Addressing Gift Cards and Provide Practice Tips for Implementation

Gift Card Considerations and Outstanding Issues Not Addressed by IRS Guidance

Examples and Case Law Considerations

Faculty
Stephen B. Jordan, EA with Stephen B. Jordan, EA

Credits
AIPB ,CPP/FPC (Pending) ,CPE ,Enrolled Agents ,Additional credit may be available upon request.

Who Should Attend

Accountants, CFOs, controllers, accounts payable professionals, tax managers, presidents, vice presidents, bookkeepers, enrolled agents and attorneys

Additional Information

Training Provider: Lorman Education Services

Course Topics: Law Training > Other

Training Course Summary: Tax Treatment of Gift Card and Certificate Sales


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