03.01.2010 Structuring Retail Gift Card Subsidiaries
03. 2010Retail gift cards raise tax and unclaimed property audit risks and present planning opportunities. As discussed in a prior Tax Alert, the IRS designated the tax treatment of amounts received from gift card sales as a “Tier II” issue. This indicates that the IRS plans to increase the audit resources it devotes to examining retailers’ tax reporting of gift card sales. (See, Williams Mullen Tax Alert, Retail Gift Cards and Store Credits — A Tax and Unclaimed Property Risk, February 2010)
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