• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Pridgeon & Zoss, PLLC

Just another WordPress site

  • Home
  • Firm Overview
    • Review Us
  • Meet Our Attorneys
  • Tax Law Services
    • CP504 Notice in MN
  • Professional Referrals
  • Our Required Retainer Deposit & Fees
  • Blog
  • Contact Us
Home / IRS / The effect of constructive receipt on income taxes
  • Home
  • Firm Overview
    • Review Us
  • Meet Our Attorneys
  • Tax Law Services
    • CP504 Notice in MN
  • Professional Referrals
  • Our Required Retainer Deposit & Fees
  • Blog
  • Contact Us
Call
Contact
Blog

The effect of constructive receipt on income taxes

Minnesota residents know that they have to report wage income on their tax returns. Typically, income is reported on a W-2 or a Form 1099. However, there are other forms of income that may need to be reported even if no cash is involved. The concept of constructive receipt says that an individual must report income when he or she has the right to receive it.

For instance, an employee may ask that an employer give him or her a yearly bonus in January as opposed to December. However, since the employee had the right to collect the money in December, it would need to be reported on that year’s tax return. An exception may be available in the event that the employer delays the payment until the following year. However, the IRS may still make a constructive receipt claim in such a scenario.

Constructive receipt may not apply if a person negotiates to have payments deferred. This may allow an individual to render services now and defer payment and tax payments until the following year. It may also not apply if payment is dependent on title to an item being transferred to another party. For instance, if someone offers to sell assets to another person, the income is reported in the year in which the transaction is completed.

Those who are having tax issues may want to talk with an attorney who has experience with these types of matters. Legal counsel might be able to take steps that may postpone future IRS collection actions such as a wage garnishment or an asset seizure.

On Behalf of Pridgeon & Zoss, PLLC Mar 01 2017 IRS

Primary Sidebar

Do Not Delay Responding to a Tax Notice

Name(Required)

Practice Areas

Tax Disputes

  • Tax Litigation
  • Audits
  • Tax Appeals
    • Appealing a Levy Action

Business & Payroll Taxes

  • Trust Fund Assessments
  • Complying with Sales and Use Tax Laws

Self-Employed

  • No Taxes Withheld

Outstanding Balances

  • IRS Collections and Currently Not Collectible Status
  • Settlement Options
    • Offers in Compromise
    • Installment Agreements

Latest Blogs

5 Things to Do if You Get Audited in Minnesota

March 27, 2023

What is a Trust Fund Recovery Penalty?

January 31, 2023

A Guide to the Minnesota Tax Appeal Process

January 27, 2023

The Secret to Successful Self-Employment

October 19, 2022

Things You Should Expect Being Self-Employed in Minnesota

October 13, 2022

Footer

Edina Tax Law Office

4951 W 77th Street, Box 11
Edina, MN 55435

Telephone: 952-835-8320

Fax: 612-682-4711

Roseville Tax Law Office:

1915 Hwy 36 West, Box 3
Roseville, MN 55113

Telephone: 612-455-8948

Pridgeon & Zoss, PLLC provides legal counsel for clients in Minnesota and Western Wisconsin

© 2025 Pridgeon & Zoss, PLLC. All Rights Reserved.

Disclaimer | Site Map | Privacy Policy