Perry Funeral Home, Inc. - Page 17

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          reasonable cause.  Respondent points particularly to the                    
          reporting by petitioner of interest on the preneed payments, the            
          choice to invest the funds in petitioner’s name rather than in              
          regulated trust accounts, and the advice petitioner received from           
          its accountant pertaining to the BayBank escrow account.                    
          IV.  Preneed Accounting                                                     
               We first consider whether the preneed payments at issue                
          should be treated as deposits governed by Commissioner v.                   
          Indianapolis Power & Light Co., 493 U.S. 203 (1990).  The Supreme           
          Court in Commissioner v. Indianapolis Power & Light Co., supra at           
          210, established what is referred to as the “complete dominion”             
          test for identifying those payments over which the taxpayer has             
          such control as to render them income:                                      
               In determining whether a taxpayer enjoys “complete                     
               dominion” over a given sum, the crucial point is not                   
               whether his use of the funds is unconstrained during                   
               some interim period.  The key is whether the taxpayer                  
               has some guarantee that he will be allowed to keep the                 
               money. * * *                                                           
          Further, the answer to this inquiry “depends upon the parties’              
          rights and obligations at the time the payments are made.”  Id.             
          at 211.                                                                     
               With respect to distinguishing between taxable advance                 
          payments and nontaxable deposits, the Supreme Court further                 
               An advance payment, like the deposits at issue here,                   
               concededly protects the seller against the risk that it                
               would be unable to collect money owed it after it has                  

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