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Washington Tax Alert July 2, 2007 (Service agrees to follow Westpac).doc
Washington Tax Alert from Don Barnes, dbarnes@washingtontaxlaw.com The Service issued a revenue procedure this afternoon ( see Rev. Proc. 2007-53) reversing its long-standing position that a lump-sum trade discount paid to a taxpayer in exchange for an agreement to purchase a specified amount of merchandise is gross income when received. For additional background relating to this issue, please see http://www.washingtontaxlaw.com/, Washington Tax Alerts dated October 6, 2006 and June 23, 2006. The Service will now follow the appellate court decision in Westpac Pacific Foods v. Commissioner , 451 F.3d 970 (9 th Cir. 2006), if the term of the contract does not exceed five years. Law Offices of Donald A. Barnes, PLLC The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. |  |         |