|
|
Article: Treatment of gift card/certificate sales: no answers, more questions.
- Article from:
- The Tax Adviser
- Article date:
- February 1, 2009
- Author:
CopyrightCOPYRIGHT 2009 American Institute of CPA's. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
Gift card sales are becoming more and more a part of our retail shopping experience. The IRS is aware that the popularity of gift cards has increased "at a remarkable rate in recent years" (LMSB-04-0507-039).
Gift card sales raise a variety of interesting federal income tax questions. The answers to these questions may depend on who is selling the gift card and for whom. For example, certain federal income tax issues arise with the use of gift card managing subsidiaries (gift card companies, described in more detail below) to sell gift cards and also with the sale of cross-redeemable gift cards.
The IRS announced that it plans to focus more on this area. ...