Seminar ID: 100608

Tax Treatment of Gift Card and Certificate Sales

Presented By:
Ellen McElroy

Pepper Hamilton LLP

You will Learn:

  • Income recognition rules and review administrative guidance that allows income deferral for advance payments.
  • How to summarize the application of advance payment guidance to gift cards.
  • How to review IRS initiatives designed to address the treatment of advance payments guidance to gift card income.
  • How to evaluate IRS guidance addressing gift cards and provide practice tips for implementation.
  • Gift card considerations and outstanding issues not addressed by IRS guidance.

Gift Card sales by credit card companies, restaurants, and merchants have exploded in recent years. CEB TowerGroup Research estimates that gift card sales will reach $130 billion by 2015 and gift card giving will grow from $3 billion in 2012 to $16 billion in 2015. According to Wikipedia, gift cards rank as the second-most given gift by consumers in the US. With the vast increase in gift cards sales, has come significant scrutiny by the IRS of the tax treatment of gifts cards. In this 10-minute segment of our full on-demand webinar, “Tax Treatment of Gift Card and Certificate Sales,” Ellen McElroy will review the recent IRS initiatives and published guidance involving gift cards. The program will also identify tax planning opportunities as well as outstanding issues regarding the treatment of gift cards.