- 19 - taxpayer's books and records and all reports to shareholders, partners, other proprietors or beneficiaries and for credit purposes. Rev. Proc. 71-21, sec. 3.11. Petitioner uses the same method for financial, regulatory, and tax accounting purposes and thus satisfies this requirement. Taxpayers who avail themselves of this procedure must maintain adequate books and records so that the amount deferred on the income tax return for any year can be verified. Rev. Proc. 71-21, sec. 4. The parties have stipulated that petitioner's books and records satisfy this requirement. Petitioner relies on Rev. Proc. 71-21 for its method of accounting for these annual credit card fees. Section 3.14 of Rev. Proc. 71-21 provides that the deferral of income in accordance with this procedure will be treated as an acceptable method of accounting under section 446 as long as the method is consistently used by the taxpayer. Petitioner consistently used the same method of accounting for these fees from the time it instituted the fees in October of 1980 through the taxable year 1985.9 Respondent cites section 3.06 of Rev. Proc. 71-21 and argues that since petitioner has not correlated the fees to specific services, petitioner is unable to avail itself of Rev. Proc. 71- 9 Respondent seems to argue on brief that petitioner improperly changed its accounting method without obtaining respondent's consent. That is not the case.Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: May 25, 2011