Can you summarize Rev. Proc. 2005-47?

Short Summary

This revenue procedure outlines the conditions under which the Commissioner will allow taxpayers to treat credit card cash advance fees as creating or increasing original issue discount (OID) on a pool of credit card loans. It applies to taxpayers who issue credit cards that allow cardholders to access a revolving line of credit for both credit card purchase transactions and cash advances. The procedure provides the exclusive method by which a taxpayer can obtain the Commissioner’s consent to change its accounting method for credit card cash advance fees. The taxpayer must be able to demonstrate that the amount of any credit card cash advance fee charged is separately stated on the cardholder’s account and that no amount identified as a credit card cash advance fee is charged for property or specific services performed by the taxpayer. The revenue procedure also references other relevant regulations and procedures for changing accounting methods and provides audit protection for taxpayers using the specified treatment of credit card cash advance fees.

Whom does it apply to?

Taxpayers who issue credit cards allowing cardholders to access a revolving line of credit for credit card purchase transactions and cash advances

What does it govern?

Conditions under which the Commissioner will allow a taxpayer to treat credit card cash advance fees as creating or increasing original issue discount (OID) on a pool of credit card loans

What are exemptions?

No exemptions are mentioned.

What are the Penalties?

No penalties are mentioned.

Jurisdiction

U.S. Federal Government

Source

Rev. Proc. 2005-47 [https://reggi.cloud.regology.com/regulations/US-IRB/US-IRB_RP_2005-47]

• Banking