Dependence On Executory Provisions Sample Clauses

Dependence On Executory Provisions. The Service avoids agreements depending upon executory provisions, i.e., that the taxpayer agrees to do something. To avoid the difficulties that may ensue if taxpayer does not perform as agreed upon, the agreement should state the tax treatment to be accorded the transaction or amount. For example, in lieu of a statement that "the taxpayer will report as income in the year received," a statement to the effect that "such amount shall be includible in the taxpayer's taxable income in the year of receipt" is ordinarily preferable. In appropriate cases it is feasible to state what the tax consequences will be if a certain event happens and what it will be if it does not happen.