Can unbilled (& unpaid) services be construed by IRS as constructive receipt and treated as taxable income for current year for a tax payer on a cash basis?
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Can unbilled (& unpaid) services be construed by IRS as constructive receipt and treated as taxable income for current year for a tax payer on a cash basis?
In other words, can income be deferred into next tax year simply by not promptly billing for services rendered?
Can unbilled (& unpaid) services be construed by IRS as constructive receipt and treated as taxable income for current year for a tax payer on a cash basis?
No. Recognizing billed but unpaid amounts is the accrual method. That not allowed for a cash basis taxpayer. "Constructive receipt" essentially means the the amount is in your possession and control and you can draw upon it anytime.
Can unbilled (& unpaid) services be construed by IRS as constructive receipt and treated as taxable income for current year for a tax payer on a cash basis?
No. Recognizing billed but unpaid amounts is the accrual method. That not allowed for a cash basis taxpayer. "Constructive receipt" essentially means the the amount is in your possession and control and you can draw upon it anytime.
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