The constructive receipt doctrine is more of an issue for cash basis taxpayers.

Question

Quizplus · Accepted Answer

The constructive receipt doctrine states that income is constructively received by a taxpayer when it is credited to their account or made available to them, even if they have not physically received it. This is more of an issue for cash basis taxpayers because they recognize income when it is received or constructively received, not when it is earned or invoiced like accrual basis taxpayers. Therefore, cash basis taxpayers must be diligent in managing their accounting and cash flow to avoid a situation where they have constructively received income but do not have the cash to pay the tax liability.

The Constructive Receipt Doctrine Is More of an Issue for Cash