LB&I Tier II Issue: Interchange and Merchant Discount Fees
What's NewCase Law Update – Capital One Financial Corporation Decision [9/21/2009] Capital One Financial Corporation was decided by the Tax Court on Sept. 21, 2009. The Tax Court ruled that credit card Interchange fees are interest and can be treated as OID subject to deferral under section 1272(a)(6), along with requiring certain adjustments to the taxpayers' deferral calculations. Please note that this decision only involved the treatment of Interchange Fees ($1.50 of the $2.00, if the total Merchant Discount Fee was 2% for a $100 sale). This decision did not rule on net Merchant Discount Fees ($.50 of the $2.00). Also, the taxpayers did not act as Merchant/Acquiring Banks for the years at issue. The Issue Management Team is currently analyzing the Capital One opinion and considering our options. Accordingly, please continue to develop any Interchange/Merchant Discount Fees Tier II issues and assert any adjustments you may have on your current examinations. Should you have any questions, please call Banking TA, Jeff Kammerman, at (212) 719-6569 or Retail TA, Dave Moser, at (636) 255-1246. |
Interchange and Merchant Discount Fees
Issue Owner: Bryan T. Inoue , Director, Field Operations, East, Financial Services
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Directive - 04-22-2008
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IDR for Banks - 09-23-2008
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IDR for Retailers - 09-23-2008
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IDR Calculator - 09-23-2008
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Directive #2 - 11-22-2010
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