- 15 -
properly deferred under the preceding sentence and for
any reason a portion of such services is not performed
by the end of the next succeeding taxable year, the
amount allocable to the services not so performed must
be included in gross income in such next succeeding
year, regardless of when (if ever) such services are
performed.
* * * * * * *
.06 In any case in which an advance payment is
received pursuant to an agreement which requires the
taxpayer to perform contingent services, the amount of
an advance payment which is earned in a taxable year
through the performance of such services may be
determined (a) on a statistical basis if adequate data
are available to the taxpayer; (b) on a straight-line
ratable basis over the time period of the agreement if
it is not unreasonable to anticipate at the end of the
taxable year of receipt that a substantially ratable
portion of the services will be performed in the next
succeeding taxable year; or (c) by the use of any other
basis that in the opinion of the Commissioner, results
in a clear reflection of income.
* * * * * * *
.11 The amount of any advance payment includible
as gross receipts in gross income in the taxable year
of receipt by a taxpayer under the foregoing rules
shall be no less than the amount of such payment
included as gross receipts in gross income for purposes
of his books and records and all reports (including
consolidated financial statements) to shareholders,
partners, other proprietors or beneficiaries and for
credit purposes.
2. Whether Petitioner Performed Services for Cardholders
Ratably Over 12 Months
Petitioner points out that it performed many services for
its MasterCard cardholders throughout the year and contends that
it earned income from annual membership fees ratably over the 12-
month period covered by those fees. We disagree with
petitioner’s contention.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011