TAX FILE MEMORANDUM
SUBJECT: Peaceful Pastures Funeral Home, Inc. (Peaceful)IRS Audit Notice
Today I met with Peaceful to discuss the IRS audit notice they received regarding the reporting of income from Peaceful’s prepaid program. FACTS: Peaceful does not report payments received from a preneed contract as income until the year in which the funeral service is provided. Peaceful’s preneed contract allows for a refund of payments at the contract purchaser’s request any time until the goods and services are provided.
ISSUE: Should Peaceful include payments received from the prepaid program as income for the year in which they are received?
CONCLUSION: Based upon the refund clause in the contract and the …show more content…
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