Rev. Proc. 2013-29 - Revised income tax accounting for advance payments from sales of redeemable gift cards 

July 24:  The IRS today released an advance copy of Rev. Proc. 2013-29 concerning accounting for advance payments received by taxpayers from the sale of redeemable gift cards.

Rev. Proc. 2013-29 [PDF 12 KB] allows a taxpayer to defer recognizing in gross income certain advance payments received from the sale of gift cards that are redeemable for goods or services by an unrelated entity.

Rev. Proc. 2013-29 modifies and clarifies prior IRS guidance (Rev. Proc. 2011-18, which in turn modified and clarified Rev. Proc. 2004-34).

Effective date, audit protection

The changes contained in Rev. Proc. 2013-29 will be treated as in effect as of the effective date of Rev. Proc. 2011-18—i.e., tax years ending on or after December 31, 2010.

Rev. Proc. 2013-29 also offers “audit protection.” For tax years ending before December 31, 2010, the revisions are to be treated as originally included in Rev. Proc. 2011-18, and thus eligible for audit protection to the extent provided in Rev. Proc. 2011-18.

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