On Mon, 12 Jan 2009 22:40:16 EST, Mark Bole <makbo[at]pacbell.net> wrote:

- quote -

The forms I used were the one's supplied by the IRS. I never received any
notification that they were inadequate, or had to be refiled.
--ron

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Ron Rosenfeld wrote:
- quote -

....In addition to the appropriate filing copies with the IRS, which must
meet some strict requirements.

-Mark Bole

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"Alan" <sfcnm-mtm[at]yahoo.com> wrote in message
news:clP9l.13771$c45.6608[at]nlpi065.nbdc.sbc.com...
- quote -

What if the payer suggested a discount for prompt payment. You would not
have to accept that to avoid constructive receipt. I would treat the extra
payment for overnight delivery the same.

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Seth wrote:
- quote -

hindering the taxpayer's right of access to income? Chartering a
plane certainly is.

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In article <D4u9l.10005$W06.5720[at]flpi148.ffdc.sbc.com> ,
Alan <sfcnm-mtm[at]yahoo.com> wrote:

- quote -

What if that cost extra? E.g. on Dec. 30, client said "I'll send the
check overnight mail for $20 (deducted from the check) or regular mail
at no charge"?

Are you in contructive receipt because you could have chartered a
plane and flown out to the customer to get a check?

Seth

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Seth <sethb[at]panix.com> wrote:

- quote -

I live in an urban area where the corner liquor stores
can handle almost any transction. :-)

Steve

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In article <gk3ct6$hfe$1[at]blue.rahul.net> ,
Steve Pope <spope33[at]speedymail.org> wrote:
- quote -

Are you assuming you have a liquor store that will cash a 5-figure
check, or were you planning to buy a lot of expensive booze?

Seth

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Alan <sfcnm-mtm[at]yahoo.com> wrote:
- quote -

In a rare moment of generousity, I too will agree that Harlan
is correct.

- quote -

This is one of several reasons Susan does not allow me to
write checks.

- quote -

Regardless of intent, one of those two checks did not have
sufficient funds. Since the check written to your client lost
the race to payment window, it also loses its constuctive
receipt label.

Let's assume this was a business check for an accounts payable.
The bank statement will show the NSF on January 3rd and the
clearing on January 4th. I can tell you with certainty that
an both a financial statements auditor and an IRS auditor will
disallow the transaction as a 12/31 payment.

Dick

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Harlan Lunsford wrote:
- quote -

interpretation of the situation is correct. But, as we all seem
to be having fun with this subject....

What if at the time of payment (New Years Eve) the payer writes a
check and presents it to our client for services rendered. At the
time the check is written, the payer believes that sufficient
funds are present, there is full intent to pay and in actuality
sufficient funds are present on 12/31. However, the payer's
partner writes a check on Jan. 1 and that check clears the bank
first, and there is insufficient funds to cover the check to our
client. The check bounces. The payer deposits funds into the
account and asks our client to resubmit the check for payment and
it clears on Jan. 4th. Was there constructive receipt on 12/31
(sufficient funds and intent were present)?

I don't know. But, this sounds similar to the lost check
scenario (see my earlier post) and I would think that intent and
sufficient funds being available on 12/31 is enough to trigger
income on 12/31.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Rich Carreiro wrote:
- quote -

Further to the subject. My favorite story is the client whom I
"suggested" to mail me his check before 12/31 so that he would have the
tax deduction that year, but I wouldn't have the income until the next
year. What did he do? He brought me the check 12/31! while I was
still at the office!

Now, if he had called me that afternoon to tell me he was bringing me
the check, and I told him to wait and bring it next year, or even mail
it as per above, that would be constructive receipt. Unless, of
course, the check were not good. Say I got the check at a new year's
eve party before midnight, since a check is a negotiable instrument,
it's income. But, of course banks are closed 1/1, and maybe 1/2 is a
Sunday, so Monday the 3rd I hie to the bank and deposit the check. So
far, so good. Friday, there's the envelope from my bank returning his
check due to insufficient funds. Constructive receipt does not now
apply to that check which I had received at the party.

Interesting, no?

ChEAr$,
Harlan Lunsford, EA n LA

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Ron Rosenfeld wrote:
- quote -

my reading of Revenue Ruling 73-99 (differentiates situation when
employees are allowed to pick up checks personally from when this
option is not available and check is mailed) & 76-3 (severance
check delivered by post office on 12/31 and employee was not
home), Info Letter 2006-0005, Treas. Reg. 1.451-2 (Income that is
set aside for the taxpayer, credited to an account, or otherwise
made available is treated as being constructively received by the
taxpayer and thus must be recognized as long as no substantial
limitations or restrictions hinder the taxpayer's right of access
to income.), 8th Circuit Walter vs USA (1998) (Constructive
Receipt trumps law of negotiable instruments), Kahler vs Commr 18
TC 31 (check delivered after banking hours on 12/31 is
constructively received),

Basic rule when dealing with payment by check:
You declare income in the year you receive the check (assumes
that the payer is capable of honoring the check for payment and
that the amount is not in dispute) unless you were in
constructive receipt in an earlier year.

You would be in constructive receipt in an earlier year under the
following conditions:

1. You were offered payment in cash but said mail me a check.
2. You were offered direct deposit but said mail me a check.
3. You were offered special handling such that the check could
have arrived earlier, but you said mail me a check.
4. You were offered no options other than the mailing of a check
and the check arrived at the address you provided to the payer in
the earlier year or would have arrived in the earlier year had
you not changed the delivery address.

Lastly, there is no requirement that I can discern that delays
actual income recognition because banks may be closed or the
nearest ATM is 1000 miles away or the local supermarket doesn't
cash checks, etc. Once you have the check or could have had the
check.. you have income.

--
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In article <m3eizdhf01.fsf[at]swing-shift.time-tripper.com> ,
Rich Carreiro <rlc-news[at]rlcarr.com> wrote:
- quote -

Since banks tend not to like third party checks, checks are much less
negotiable than they used to be.

Seth

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"D. Stussy" <spam[at]bde-arc.ampr.org> writes:

- quote -

Why not? If you were handed the check at a New Year's Eve party
there were quite possibly many people you could have endorsed the
check over to for cash. Checks are negotiable instruments. You're
not limited to cashing it at a bank.

--
Rich Carreiro rlc-news[at]rlcarr.com

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"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9B8C741F9334avocatstuyahoofr[at]130.133.1.4...
- quote -

Gee, you had me convinced otherwise. I was so sure it was unreasonable to
be handed a check after business hours on December 31 and have it treated as
that year's income I did some research, and came upon a number of cases
which cite Kahler approvingly:

A check normally is constructively received when it is delivered to the
taxpayer or his agent.(15) In Kahler v. Commissioner,(16) the Tax Court held
that a check was delivered to the taxpayer even though it was received after
banking hours on the last day of the year.

here is a good article on a wide variety of aspects of the Doctrine of
Constructive Receipt.

http://findarticles.com/p/articles/m...g=artBody;col1

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Dick Adams <rdadams[at]panix.com> wrote:

- quote -

I could cash the check at a liquor store before mignight in either
case.

Steve

--
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Stuart Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

There is some merit to Seth's argument. But what is the difference
between getting a check at 3pm or at 10:30pm. It's not going to
be credited to your bank account until the next business day.

If you got a check for $10 million from a lottery at 3pm on 12/31,
do you think the IRS is going to buy the argument that you couldn't
get the cash until two or three days later?

After reading some IRS info, I'm going to change my position
to "I had actual receipt". If I had asked the person writing
the check to mail it to me, then I would have had constructive
receipt.

To add some humor to this, the 12/31/82 check was for $12 grand and
change. The client was a large bank who had previously paid my
invoices within 15 days. So I was surprised that this bank officer
even had a checkbook from which to write a check. However, I had
paid all outstanding business debts a few days earlier so they
would be 1982 expenses.

Dick

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"D. Stussy" <spam[at]bde-arc.ampr.org> wrote:

- quote -

On reflection I have to agree with that. The courts appear to find
constructive receipt when the recipient has the actual ability to get
cash before the end of the year rather than theoretical ability.

Stu

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"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9B8A7CF7ECD00avocatstuyahoofr[at]130.133.1.4...
- quote -

I must disagree. Constructive receipt is when one CAN cash the check
but doesn't. It has to be made available. Receiving the check after
a time where it couldn't be tendered (deposited or cashed) violates
the concept.

(In today's world, with ATM's and check-cashing places available and
about 90 minutes left, it would be constructively received, but back
in 1982, many banks didn't have ATMs yet and we didn't have
check-cashing only businesses yet.)

Today, if one gets handed a check at 11:59pm on 12/31, it's not
constructive receipt unless one is standing in front of an idle ATM!
;-)

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On Jan 6, 7:24*am, se...[at]panix.com (Seth) wrote:
- quote -

I think the IRS's position is that a lottery ticket is, in theory, NOT
a bearer instrument. The process of cashing it involves verification
that the person is over the relevant age, and the the decision of
whether to take immediate cash or installment payments has been ruled
(almost certainly, in direct contradiction to the statutes) to make
the value not determinable until it's redeemed.

Hence there's constructive receipt of a lottery ticket in the previous
year, but not a WINNING lottery ticket.

But I could easily be wrong.

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On Tue, 6 Jan 2009 10:24:28 EST, sethb[at]panix.com (Seth) wrote:

- quote -

You are perhaps expecting logic and consistency from the IRS? :-)
--ron

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >