Businesses that offer cash refunds to unsatisfied customers better be prepared to document these payments. If not, they cannot offset revenues for the year. That’s what an owner of a driving school learned from the Tax Court. Payments by customers were made by credit card and the third-party processor issued Form 1099-K to the owner reporting the gross amount he received. But he couldn’t reduce gross receipts by cash returns or allowances he claimed to have made because he couldn’t prove them (no canceled checks, credit card chargebacks, or any other records). #IdeaoftheDay
