These "refund after overcharge" things are not without benefit to the corporations.
They get a nice tax write-off.
It's couch-cushion change for them, but it adds up. They have whole armies of beancounters, dreaming this stuff up.
It's also the game behind those "coupons" you get, for outrageously-priced meds that aren't covered by insurance.
If they charge $1,000 for the medication, but give you a "special discount" for $90%, they get to write off $900.
I’m fairly certain that’s incorrect.
Businesses are only taxed on actual revenue earned.
What you decide to charge—whether $100, $50, or even giving it away for free—is purely a business decision, not a tax one.
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This is different from a nonprofit donation scenario though. For example, if your service normally costs $X but you choose to provide it for free (or at a discount) as a donation to a non-profit, you can typically write off the difference.
You may be right (this is not my forte), but the invoice is real. So is the forgiveness. I don’t see how the IRS can legitimately deny a write-off.
I’ve heard stories like this, many times, from businesses people.
They certainly believe in the pattern.
> Businesses are only taxed on actual revenue earned.
I don't want to go too far down the rabbit hole of hn speculation, but if another entity owes you 100k, and they go bankrupt, there absolutely are tax implications.
Agreed … but that is a different situation.
That is a lack of payment situation.
Revenue was still earned (and charged) … and since you never collected revenue then you don’t pay taxes.
Actually, I described two different things.
The second one (the prescription one) may well be wrong. It’s total speculation, on my part.
The first one, though, I’m pretty sure is right.
I love the traditional debate tactic, where we find one part of an argument to be wrong, and use that, to say the other part is, too.
It’s no matter. I’m done here, anyway, and yield to you. The fox ain’t worth the chase.
Would the tax implications not just be for whatever it costs on their end, regardless of what the customer was charged?
Smells like fraud.
A lot of things are "fraud" when an individual or small business does it but perfectly normal and considered merely good business acumen when done by a big corporation. Even more so now that the US government is openly for sale (it was always for sale, but before at least they had the decency to pretend it wasn't).
Yeah man the whole industry is like that. OpenAI gets to say they raised X billion dollars and update their valuation but they don't mention that it's all cloud compute credits from a gigantic Corp that owns a huge amount of the business. They claim to be a non-profit to do the research then when they've looted the commons, they switch to for profit to pay out the investors. There's shit like this throughout the industry.