Has anyone here doing MS get audited byv the IRS?

[good sam]

here is my question for you EJB. Lets use an over simplified example. Yuo sign up for a credit card that gives you an Ipad (lets assume worth $500) after first purchase. Everyone agrees I dont need to report the ipad. Now lets say I sell that Ipad for $400 do I need to pay taxes on the $400?

Why not?

[myb821]

Why not?

why should your basis not be what the iPad was worth. Also if the bank gave you $500 in cash as the rebate you wouldn't have to claim it but now because they gave me an item worth $500 and I sold it suddenly I do?

[EJB]

why should your basis not be what the iPad was worth. Also if the bank gave you $500 in cash as the rebate you wouldn't have to claim it but now because they gave me an item worth $500 and I sold it suddenly I do?

There is basis for that argument, although there are differences between the cases  (https://www.irs.gov/pub/irs-drop/a-02-18.pdf)

Also, I don't think it's clear that cc sign on bonuses are exempt from tax. Even if there's a min spend requirement, I don't recall the IRS stating that it is specifically a rebate.

[Hershelsdeals]

Why do I find that hard to believe?
You open lots of cards. At least your posts would indicate that you do.
Do you deliberately refrain from MS for a reason?

I don't deliberately refrain from MS, i know absolutely nothing about MS.

I do legitimate min spend.

[benjie1305]

Why do I find that hard to believe?
You open lots of cards. At least your posts would indicate that you do.
Do you deliberately refrain from MS for a reason?

Enough points to be gotten from opening cards on its own especially in conjunction with some people having real businesses that they swipe a lot of money for. Not MS but still gets the job done.

[Hershelsdeals]

Enough points to be gotten from opening cards on its own especially in conjunction with some people having real businesses that they swipe a lot of money for. Not MS but still gets the job done.

+1000000

[CS91]

I seem to recall that someone on the forums was audited for MS and got through eventually.

That makes it sound like it was tough to get through the audit...

[Tzadik Nistar]

There is basis for that argument, although there are differences between the cases  (https://www.irs.gov/pub/irs-drop/a-02-18.pdf)

Also, I don't think it's clear that cc sign on bonuses are exempt from tax. Even if there's a min spend requirement, I don't recall the IRS stating that it is specifically a rebate.

The portion of the credit card purchases that Taxpayers can either receive back in cash or request Company to pay to a charity does not constitute gross income under § 61;

Section 61 provides that gross income means all income from whatever source derived.
A rebate received by a buyer from the party to whom the buyer directly or indirectly paid the purchase price for an item is an adjustment in purchase price, not an accession to wealth, and is not includible in the buyer’s gross income. See Rev. Rul. 76-96, 1976-1 C.B. 23, as modified by Rev. Rul. 2005-28, 2005-1 C.B. 997.

[EJB]

The portion of the credit card purchases that Taxpayers can either receive back in cash or request Company to pay to a charity does not constitute gross income under § 61;

That's for purchases, and doesn't necessarily apply to sign on bonuses. Obviously bonuses that require spend are safer than bonuses that don't require spend (i.e. AS), but both r in a grey area.

[Hershelsdeals]

That's for purchases, and doesn't necessarily apply to sign on bonuses. Obviously bonuses that require spend are safer than bonuses that don't require spend (i.e. AS), but both r in a grey area.

Doea gray area mean one must go Lchumra?

[chulent613]

Doea gray area mean one must go Lchumra?

Also gray...

[dealfinder85]

Also gray...

what ever happened to hamotzi mechaveiro alav haraya?
the IRS doesnt abide by that rule?

[chulent613]

what ever happened to hamotzi mechaveiro alav haraya?
the IRS doesnt abide by that rule?

The IRS is nobody's "chaveiro".

[dealfinder85]

The IRS is nobody's "chaveiro".

lol

[Ydad]

what ever happened to hamotzi mechaveiro alav haraya?
the IRS doesnt abide by that rule?

The IRS is nobody's "chaveiro".

They don't believe in "innocent until proven guilty" either

[Yehuda25]

The IRS is nobody's "chaveiro".

LOL!

[Ephcc90]

The real issue is if the argument that it isn't income can pass the threshold of reasonableness to avoid penalties. Then worst case scenario you can always pay it later maybe with a little interest.   

[EJB]

what ever happened to hamotzi mechaveiro alav haraya?
the IRS doesnt abide by that rule?

It's up to you to demonstrate income isn't taxable 

[emjee]

Lol. I can't believe that this is actually being discussed . Go ask your accountant .....side note--- if your actually worried about anything to do with the IRS (about cash for points, I am not ) , the one thing you can do for yourself and everyone else involved is to discussing this matter is to not discuss it.

[myb821]

Lol. I can't believe that this is actually being discussed . Go ask your accountant .....side note--- if your actually worried about anything to do with the IRS (about cash for points, I am not ) , the one thing you can do for yourself and everyone else involved is to discussing this matter is to not discuss it.

alol what the heck does discussing it do.