Ezel / IRS Rulings / 9932049

TAM 9932049: IRS replaces a footnote on timing of service contract income

Number
9932049
Outcome
Advice
Document type
Technical Advice Memorandum
IRS subject
General Rule for Methods of Accounting (Permissible v. Not Permissible)
Topics
Accounting methods and periods
Code sections
§ 446
Ruling dated
February 25, 1999
Publicly released
August 13, 1999
Source
View Official PDF

Apply this to your situation

This page covers IRS technical advice on one taxpayer's case, issued in 1999, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 1999
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It answered an IRS office's question about one taxpayer's case on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
Transcribed from a scanned original: the IRS released this determination as an image-only PDF. The full text below is a machine transcription, proofread against the scan. Check the original PDF before quoting exact language.
View official IRS release (PDF)

Plain-English summary

A taxpayer's representative asked the IRS to amend a footnote in an earlier technical advice memorandum. The IRS replaced that footnote to say the taxpayer ordinarily did not receive payments before they were due under its service contracts. As a result, payment ordinarily would not be the earliest event fixing its right to receive income. The rest of the earlier memorandum remained in effect. The correction concerns when service contract income is recognized.

Ruling snapshot

  • Question: What should footnote 1 on page 6 of TAM 9818004 say about advance payments under the taxpayer's service contracts?
  • Outcome: Advice given; the footnote was replaced and all other provisions were left in force.
  • Key authorities: TAM 9818004; IRC § 446 (UILC classification).

Full text (IRS public release)

199932049

Internal Revenue Service
Department of the Treasury

UIL: 446.00-00
Washington, DC 20224

Person to Contact:

Telephone Number:

Refer Reply To:
CC:DOM:IT&A:5- TAM-105137-99
Date:
FEB 25 1999

Attention:
Dear

This letter responds to a letter of February 23, 1998, from your authorized
representative,
Specifically, the letter
requested the amendment of footnote 1 on page 6 of TAM 9818004 (TAM-107297-97), issued on May 1, 1998. This letter modifies TAM 9818004 by deleting footnote 1 on page 6 and replacing it with the following:

Taxpayer does not ordinarily receive payments in advance of the time when payment is due under its service contracts; thus, the earliest event fixing its right to receive income will not ordinarily be payment.

All other provisions of TAM 9818004 are unchanged and remain in full force and effect.

Pursuant to a power of attorney on file, we are sending copies of this letter to

Sincerely,

Assistant Chief Counsel
(Income Tax & Accounting)

By:
Douglas A. Fahey
Assistant to Branch Chief

cc:

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