Tax Treatment of Gift Card and Certificate Sales

Gain a better understanding of the proper treatment of gift card income and whether you can take advantage of income deferral provisions.

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. Gift card revenue is exploding. Total annual volume of gift cards is projected to reach $160 billion by 2018, with only $1 billion going unused.

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. To be addressed is the limited exception available for coupons issued with sales and the application of this deferral provision following the Capital One decision.

Learning Objectives:

This Live Webinar Covers These Hot Issues:

• Review Income Recognition Rules, IRC §451 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

Credit Information (Sponsored by Lorman Education Services):

• CPE
• AIPB
• NASBA
• CPP/FPC

For Detailed Credit Information page click here

Only registered attendee will receive continuing education credit.

Instructor Profile:

Stephen B. Jordan, EA

• Owner at Stephen B. Jordan, EA for more than 30 years
• More than 35 years’ experience in accounting, auditing and tax services
• Experience includes Tax Defense Network – Affiliated Partner; Lorman Education Services IRS Form 1099 Reporting: What You Need to Know; community outreach volunteer, NH Pro-Bono, Low Income Taxpayer Project; past Community outreach volunteer, Bentley Low Income Taxpayer Clinic; past adjunct faculty of accounting and taxation at: Franklin Pierce College, 1988-1989; New Hampshire College, 1993; and Hesser College, 1999; KPMG Peat Marwick – Sr. Accountant, 1982 -1985; Wolf & Company CPA’s PC – Audit Supervisor/CISA, 1985 – 1986; General Cinema Corp – Sr. Internal Auditor, 1986 – 1987; Comprehensive Accounting Corporation – Affiliate/Accountant 1987 – 1990; wrote accounting and tax articles for EA Journal and National Public Accountant professional journals; speaker at self-help tax strategy seminars
• Member of the NATP, NAEA, MaSEA and NNESEA
• M.S.T. degree, William Howard Taft University; College for Financial Planning; M.B.A. degree, Indiana University; B.S. degree, University of New Hampshire
• Can be contacted at 603-508-0124 or stephenbjordan50@gmail.com