Tax Research 4 66 Essay

Submitted By dirk2501
Words: 654
Pages: 3
Open Document
Bold Corporation wants to pay $25 to each full-time employee in recognition of the holidays. The issue is whether the amounts are taxable income to its employees and whether the Bold Corporation can deduct the amounts.
The case in question is Hallmark Cards Inc. v. United States of America. In this case Hallmark, the plaintiff, normally had a Christmas party every year. Hallmark plants were located throughout the country with their main hub located in Kansas City, Missouri. Based on the high number of people living outside of Kansas City who wanted to drive home for the holidays, the parties became unsatisfactory. Also, the gift of a turkey was not desirable since many employees were unmarried. Therefore, the plaintiff started a special gift certificate plan in 1955. This plan consisted of a $25 certificate for full-time employees and $15 for part-time employees. These certificates could be redeemed for merchandise at any store that sold Hallmark products. Salesmen did not receive a gift certificate because of the different financial arrangement that consisted with the company. Tax on the value of the certificates was not withheld from the wages or salary by the plaintiff. Furthermore, the plaintiff took credit on tax returns for the amounts of the certificates. Hallmark is looking to recover the tax amount that they paid.
The facts in the Hallmark case are pretty simple. The general rule is gross income does not include the value of property acquired by gift, bequest, devise or inheritance. The company pays employees wages for services performed by the employees. Hallmark’s intention was to give the certificates as gifts and not a part of wages. According to Rev. Rul. 59-58 C.B. 59-1 “In view of the small amounts involved, and since it may reasonably be contended in many cases that such items constitute excludable gift, it is similarly held that the value of such an item of merchandise need not be treated as taxable income by the employees who receive it”. Keep in mind that the certificates could not be redeemed for cash, but only for merchandise. The gifts were given to promote health, good will, or contentment to every employee for the same amount based on their employment status. Salesmen did not receive a certificate nor did they receive an invitation to the Christmas parties. The certificates were also considered relatively small amounts. These are the reasons why the court in favor of Hallmark and were not subject to withholding tax.
Show More

Related Documents: Tax Research 4 66 Essay

Essay on Research project

Research Project Tax research problems Part A: I:2-67 The parents in this case are entitled to the dependency exemption for their baby. They would have to per sec. 151 have to get a social security number for the child. The medical expense’s they incurred along with birth and death certificates would act as qualifying documents. Anderson, K. (2015). Prentice Hall's federal taxation 2015: Individuals. Upper Saddle Ridge, N.J.: Pearson Education I:3-63 HUD information along with Reg. Sec.…

Words 309 - Pages 2

Essay about miracle on ice

Gallagher A 2012 survey done by Ipsos- Reid exhibited that 66 percent of Canadians supported the decriminalization or legalization of marijuana. Many major politicians have positively reinforced the legalization of marijuana. Trudeau, Darrell Dexter, Kathleen Wynne, Jim Flahaery, Tom Muclair and Brad W all admit that they’ve used the drug and believe it should be legalized. A survey published by Halifax-based Corporate Research Associates Inc. shows that 49 percent of Nova Scotian’s are for…

Words 1040 - Pages 5

A Study On Analysis Of Value Added Tax System

A Study on Analysis of Value Added Tax System By Ajay Dongol P.U. Reg. No. 2007-2-03-0176 Roll. No. 831455 A Summer Project Submitted to: Ace Institute of Management Pokhara University In Partial fulfillment of the requirements for the degree of Bachelor of Business Administration New Baneshwor Kathmandu December, 2009 i ACKNOWLEDGEMENT I would like to express my gratitude to Ace Institute of Management along with Mr. Prakash C. Bhattarai, our course instructor for providing…

Words 9432 - Pages 38

Foreign Direct Investment And Development

Moran, Theodore H. 2011. Foreign direct investment and development: launching a second generation of policy research: avoiding the mistakes of the first, reevaluating policies for developed and developing countries. Washington, D.C.: Peterson Institute for International Economics. 1. What are the four forms of FDI and why make a distinction between the forms? FDI in Extractive sector, FDI in Manufacturing, FDI in infrastructure, FDI in services They are large in absolute terms and relative…

Words 1116 - Pages 5

Tax Marketing Plan

Express Tax Services Marketing Plan Group E Executive Summary 4 2.0 Situation Analysis 4 2.1 Market Summary 5 2.1.1 Market Demographics 5 2.1.2 Market Needs 6 2.1.3 Market Trends 7 2.2 SWOT Analysis 8 2.3 Competition 9 2.4 Product Offering 10 2.5 Keys to Success 11 2.6 Critical Issues 11 3.0 Market Strategy 11 3.1 Mission 11 3.2 Marketing Objectives 12 3.3 Financial Objectives…

Words 4337 - Pages 18

Internship Report Sample

Giri Institute of Development Studies (GIDS) is thirty nine years old research institute. Established in 1973, as an autonomous research institute on the initiative of some eminent social scientists and public personalities. GIDS, Lucknow was brought within the umbrella of the Indian Council of Social Science Research (ICSSR), New Delhi and accorded the status of an institution of national importance in 1977. Since then it has been regularly…

Words 8014 - Pages 33

Ethical Investment Report on Westpac Essay

14), triple bottom line can be considered as a process in which the rights of shareholders are deprived by creating the organization’s obligations to others groups (stakeholders) and the money spent on maintaining this relationship is likely to be a tax on shareholders. Another obstacle of the ethical investment issue is the limitation of portfolios. Michael Knoll (cited in Hoggett et al. 2002, p. 5) states that very possibly investing ethically will be riskier than investing conventionally and many…

Words 2045 - Pages 9

Sustainable Tourism Development Case Study

growing sector in the world, as it frequently connected with an export industry (Naidoo, 2011). By now, that sector tale for 9.8% of global Gross Domestic Product and 284 million jobs. Due to that trend the tourism global GDP is expecting to rise by 4% per annum over the coming 10 years (World Travel & Tourism Council, 2016). Hence, small islands developing states like Mauritius benefits incredibly from tourism economic for developing its nation. But frequently these economic benefits are not fairly…

Words 1419 - Pages 6

Developing an Effective and Efficient Tax System in a Developing Economy - a Case Study of Ghana Essay

UNIVERSITY OF CAPE COAST SCHOOL OF BUSINESS DEVELOPING AN EFFECTIVE AND EFFICIENT TAX SYSTEM IN A DEVELOPING ECONOMY - A CASE STUDY OF GHANA A PROJECT WORK PRESENTED TO THE DEPARTMENT OF ACCOUNTING AND FINANCE, SCHOOL OF BUSINESS, UNIVERSITY OF CAPE COAST IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR AWARD OF A BACHELOR OF COMMERCE DEGREE. JUNE 2005 MEMBERS OF THE PROJECT TEAM NAME SIGNATURE NUMBER…

Words 29838 - Pages 120

Parking Lot Essay

.......................................................4 Conclusions .......................................................................................................................4 The Solution: EzPARK ...........................................................................................................4 Background on MOTEs .......................................................................................................4 Product Description....................................…

Words 5332 - Pages 22