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summarized that “if the payor controls the conditions under which
the money will be repaid or refunded, generally, the payment is
not income to the recipient.” Herbel v. Commissioner, supra at
413. “On the other hand, if the recipient of the payment
controls the conditions under which the payment will be repaid or
refunded, we have held that the recipient has some guaranty that
it will be allowed to keep the money, and hence, the recipient
enjoys complete dominion over the payment.” Id. at 414.
Thus, while refundability per se is insufficient for
identifying nontaxable deposits, Johnson v. Commissioner, 108
T.C. 448, 470-471 (1997), refundability within the buyer’s
control and outside that of the seller is a significant indicator
under the current jurisprudence. Additionally, to the extent
that any further factual refinement is warranted to distinguish
“the Indianapolis Power & Light line of cases” from earlier
opinions discounting the importance of the refundability
criterion, the law classifying amounts as nontaxable deposits is
clear at least insofar as “the taxpayer’s right to retain them
was contingent upon the customer’s future decisions to purchase
services and have the deposits applied to the bill.” Johnson v.
Commissioner, supra at 471.
As to other potential indicia, both the Supreme Court in
Commissioner v. Indianapolis Power & Light Co., supra, and this
Court have held that factors such as control over deposits (i.e.,
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