Note: Some companies do not take into account « returns and sales allowances. » They record customer visits by directly debiting « sales. » However, it is a good thing to keep the above account in order to be able to track allowances and allowances and, if necessary, make decisions on them. The IRS also found that the rebate was intended to reduce the cost of all proceeds from the loan, since the quotas were not related to certain storage items, but related to all items purchased by a certain lender. The IRS is carefully reviewing the various types of lender benefits to determine whether they are gross income, expense allowances, commercial rebates or other dividends under Treas. This is what the IRS has called a Tier III problem (the highest compliance risk for a given industry). If the certificates are duly treated as a commercial discount, the question arises as to whether the certificates should reduce the cost of all goods purchased by the seller or only the cost of the defective product. « Returns of sales and allowances » is a counter-income account. It is deducted from the « revenue » (or « gross sales ») in the income statement. The sale price refers to actual product returns from customers due to the delivery of defective or erroneous products. The volume of sales is generated when the customer agrees to keep the products below the original price. A discount that is always allowed regardless of payment time is a commercial discount. The IRS treats the buyer as paying a net price after the commercial discount (Revenue Ruling 84-41). The CCA cites Pittsburgh Milk Co. (26 TC 707 (1956)) for the proposition that, if the purpose and intent of the allocation are to reach an agreed selling price, the allocation is an adjustment to the selling price (purchase).
It is interesting to note that the IRS has struggled for years against this precedent on the sellers` side, preferring to treat the quotas granted by the seller as deductions subject to the restrictions provided by the CRI 162, such as the . B of economic performance. (See « Tax Treatment of Discounts Can Clear Up, » JofA, October 08, page 42, for the question of how the IRS relaxes its position on the seller side.) At the CCA, when purchasing property, the taxpayer received a « returned/erroneous seller premium » from some sellers. The allowance was shown as a percentage of total purchases and did not normally require the actual return of the goods. The agreement did not provide for a refund or reduction of the allowance if the incorrect rate was lower than the estimated rate. In a recently published chief advice, the IRS found that some quotas received by sellers of defective products should be treated as a reduction in storage costs under Treas. Tours and sales bonuses are a matching account that is deducted from the turnover. This is a sales revaluation account representing debtor returns and deductions at the initial selling price if the debtor accepts defective products.