Barnett Banks v. Commissioner
United States Tax Court
P, an accrual basis taxpayer, is in the banking business and issues credit cards. P charges its cardholders an annual membership fee that entitles the cardholder to, inter alia, use of the card with participating merchants, free replacement of lost or stolen cards, 24-hour access to P's customer service staff, and withholding of payment of disputed charges.
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P, an accrual basis taxpayer, is in the banking business and issues credit cards. P charges its cardholders an annual membership fee that entitles the cardholder to, inter alia, use of the card with participating merchants, free replacement of lost or stolen cards, 24-hour access to P's customer service staff, and withholding of payment of disputed charges. P has the right to cancel the credit card at any time, but, if the card is cancelled, the annual fee is refunded ratably for the number of months remaining in the 1-year period. 1. Held, the annual membership fees constitute payments for…
1Opinion of the Court
Parker, Judge:
Respondent determined deficiencies in petitioner’s Federal income tax as follows:
TYE Deficiency
12/31/72 $1,299
12/31/76 112,652
12/31/78 379,041
12/31/80 1,694,423
12/31/81 961,212
Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the taxable years before the Court, and all Rule references are to the Tax Court Rules of Practice and Procedure.
The issues for decision are: (1) Whether annual credit card fees received by petitioner in the taxable years 1980 and 1981 constitute payments for services rendered or made available to its…
2Cases cited16 opinions
- Automobile Club of Mich. v. CommissionerSupreme Court of the United States · 1957
- Thor Power Tool Co. v. CommissionerSupreme Court of the United States · 1979
- Commissioner v. HansenSupreme Court of the United States · 1959
- American Automobile Assn. v. United StatesSupreme Court of the United States · 1961
- Commissioner v. Idaho Power Co.Supreme Court of the United States · 1974
11 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- American Express Company and Affiliated Subsidiaries v. United StatesCourt of Appeals for the Federal Circuit · 2001
- Estate of Benjamin Shapiro, Deceased, Saul A. Shapiro, and Stephen Shapiro v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1997
- Signet Banking Corp. v. CommissionerUnited States Tax Court · 1996
- American Express Co. v. United StatesUnited States Court of Federal Claims · 2000
- Straight v. Comm'rUnited States Tax Court · 1999
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