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furnished goods or services. But an advance payment
does much more: it protects against the risk that the
purchaser will back out of the deal before the seller
performs. From the moment an advance payment is made,
the seller is assured that, so long as it fulfills its
contractual obligation, the money is its to keep.
Here, in contrast, a customer submitting a deposit made
no commitment to purchase a specified quantity of
electricity, or indeed to purchase any electricity at
all. IPL’s right to keep the money depends upon the
customer’s purchase of electricity, and upon his later
decision to have the deposit applied to future bills,
not merely upon the utility’s adherence to its
contractual duties. * * *
* * * * * * *
It is this element of choice that distinguishes an
advance payment * * * The individual who makes an
advance payment retains no right to insist upon the
return of the funds; so long as the recipient fulfills
the terms of the bargain, the money is its to keep.
The customer who submits a deposit to the utility * * *
retains the right to insist upon repayment in cash; he
may choose to apply the money to the purchase of
electricity, but he assumes no obligation to do so, and
the utility therefore acquires no unfettered “dominion”
over the money at the time of receipt. [Id. at 210-
212; fn. ref. omitted.]
This Court, in applying the reasoning of Commissioner v.
Indianapolis Power & Light Co., supra, has similarly emphasized
the importance of which party controls the conditions under which
repayment or refund of the disputed amounts will be made. See,
e.g., Herbel v. Commissioner, 106 T.C. 392, 413-414 (1996), affd.
129 F.3d 788 (5th Cir. 1997); Highland Farms, Inc. v.
Commissioner, 106 T.C. 237, 251-252 (1996); Kansas City S.
Indus., Inc. v. Commissioner, 98 T.C. 242, 262 (1992); Michaelis
Nursery, Inc. v. Commissioner, T.C. Memo. 1995-143. We have
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