An issue has been raised as to the tax treatment of these deposits

Accounting Mar 13, 2023

An issue has been raised as to the tax treatment of these deposits. Specifically, would these payments be treated as advance payments for services rather than deposits. I am aware of a long line of cases (Schlude, AAA etc.) that hold that advance payments for services are prepaid income and currently taxable. On the other hand, I know that mere security deposits are not currently taxable.