T.C. Memo. 2003-340
UNITED STATES TAX COURT
PERRY FUNERAL HOME, INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14722-02. Filed December 16, 2003.
P is a funeral home organized and operating in
Massachusetts. During the years in issue, P entered
into preneed funeral contracts and received payments in
advance of death for goods and services to be provided
later at the contract beneficiary’s death. These
payments were refundable at the contract purchaser’s
request, pursuant to State law, at any time until the
goods and services were furnished. P, an accrual basis
taxpayer, included these payments in income not in the
year of receipt but in the year in which the goods and
services were provided.
Held: Payments received by P under its preneed
funeral contracts are includable in gross income only
upon the provision of the subject goods and services.
Held, further, P is liable for the sec. 6662,
I.R.C., accuracy-related penalty with respect to items
conceded by P, apart from the preneed accounting issue.
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