106 T.C. No. 5
UNITED STATES TAX COURT
SIGNET BANKING CORPORATION, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7887-92. Filed February 29, 1996.
Christopher Kliefoth and Ralph I. Petersberger, for
petitioner.
Phillip A. Pillar and Scott D. Anderson, for respondent.
P is in the banking business. P issued credit
cards. P charged its credit card holders an annual
membership fee. The cardholder agreement provided that
the fee was paid in consideration of the issuance of a
card and establishment of a credit limit. The
agreement stated that P could close a cardholder’s
account at any time and that the annual membership fee
was nonrefundable. P is an accrual method taxpayer.
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