The Tax Court held that charge card “interchange” costs received by subsidiaries of charge card issuer Capital One resembled interest that increased or produced issue that is original (OID) pertaining to the company’s pool of charge card receivables.

The Tax Court held that charge card “interchange” costs received by subsidiaries of charge card issuer Capital One resembled interest that increased or produced issue that is original (OID) pertaining to the company’s pool of charge card receivables.

The court said as OID, a daily amount was properly included in income over the life of the credit card obligation. The court additionally discovered that the accounting technique employed by the taxpayer to determine the inclusion that is daily of associated with over-limit costs and interchange costs ended up being generally speaking reasonable; nonetheless, it revised three aspects of the calculation, saying they would not adhere to IRC В§ 1272.Continue reading