Author Topic: FBI Raids Orthodox Homes  (Read 234845 times)

Offline David Smith

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Jun 2015
  • Posts: 8075
  • Total likes: 212
  • DansDeals.com Hat Tips 13
    • View Profile
Re: FBI Raids Orthodox Homes
« Reply #1020 on: July 07, 2017, 12:08:26 PM »
Quote
Part IV
Items of General Interest
Frequent Flyer Miles Attributable to Business or Official Travel
Announcement 2002-18
Most major airlines offer frequent flyer programs under which passengers
accumulate miles for each flight. Individuals may also earn frequent flyer miles
or other promotional benefits, for example, through rental cars or hotels. These
promotional benefits may generally be exchanged for upgraded seating, free
travel, discounted travel, travel-related services, or other services or benefits.
Questions have been raised concerning the taxability of frequent flyer miles or
other promotional items that are received as the result of business travel and
used for personal purposes. There are numerous technical and administrative
issues relating to these benefits on which no official guidance has been provided,
including issues relating to the timing and valuation of income inclusions and the
basis for identifying personal use benefits attributable to business (or official)
expenditures versus those attributable to personal expenditures. Because of
these unresolved issues, the IRS has not pursued a tax enforcement program
with respect to promotional benefits such as frequent flyer miles.
Consistent with prior practice, the IRS will not assert that any taxpayer has
understated his federal tax liability by reason of the receipt or personal use of
frequent flyer miles or other in-kind promotional benefits attributable to the
taxpayer’s business or official travel. Any future guidance on the taxability of
these benefits will be applied prospectively.
This relief does not apply to travel or other promotional benefits that are
converted to cash, to compensation that is paid in the form of travel or other
promotional benefits, or in other circumstances where these benefits are used for
tax avoidance purposes.
For information regarding this announcement, call (202) 622-4606 (not a toll-free
number). Alternatively, taxpayers may transmit comments electronically via the
following e-mail address: Notice.Comments@irscounsel.treas.gov. Please
include “Announcement 2002-18" in the subject line of any electronic
communications.
Who do you think you are fooling? You think you are going to pull a quick one on your Creator? Good luck with that.
JTZ

Offline Dan

  • Administrator
  • Dansdeals Lifetime 50K Diamond Elite
  • **********
  • Join Date: May 2008
  • Posts: 67598
  • Total likes: 16909
  • DansDeals.com Hat Tips 16442
  • Gender: Male
    • View Profile
  • Location: CLE
  • Programs: UA GS, AA EXP, DL Dirt, Hyatt Glob, Fairmont Lifetime Plat, DD Diamond, Blocked By @NeriaKraus
Re: FBI Raids Orthodox Homes
« Reply #1021 on: July 07, 2017, 12:09:31 PM »
We're not talking about travel converted to cash, we're talking about credit card purchase rebates.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline ExGingi

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Nov 2015
  • Posts: 15618
  • Total likes: 7711
  • DansDeals.com Hat Tips 19
    • View Profile
  • Location: 770
  • Programs: בשורת הגאולה. From Exile to Redemption. GIYF. AAdvantage Executive Platinum®
Re: FBI Raids Orthodox Homes
« Reply #1022 on: July 07, 2017, 12:11:28 PM »
You buy something for $100.
A 2% CB card gives you $2 cash back, non-taxable purchase rebate.
A 2mpd card gives you 2 miles as a purchase rebate. You sell to a broker for $3. Why is that $3 not a purchase rebate from your $100 purchase, just like the cash back is? I'd argue it is.
I hear your argument, but I would counter, that once you got the rebate which in this case in not in the form of cash/currency, but rather something else (a commodity?), and now you sell it for more than the bank would credit you for it (IINM Chase allows you to use UR at a value of 1 cent towards your balance) which could be considered true FMV, as T&C don't allow selling, the difference between what the bank would give you for it, and what you sold it for could be a capital gain.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline TimT

  • Dansdeals Lifetime 20K Presidential Platinum Elite
  • ********
  • Join Date: Dec 2013
  • Posts: 22077
  • Total likes: 7130
  • DansDeals.com Hat Tips 12
    • View Profile
Re: FBI Raids Orthodox Homes
« Reply #1023 on: July 07, 2017, 12:12:26 PM »
There is guidance from the IRS for businesses but AFAIK nothing on personal use.
And that's why it's
unlikely there would be arrests over it.

Offline ExGingi

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Nov 2015
  • Posts: 15618
  • Total likes: 7711
  • DansDeals.com Hat Tips 19
    • View Profile
  • Location: 770
  • Programs: בשורת הגאולה. From Exile to Redemption. GIYF. AAdvantage Executive Platinum®
Re: FBI Raids Orthodox Homes
« Reply #1024 on: July 07, 2017, 12:15:09 PM »
We're not talking about travel converted to cash, we're talking about credit card purchase rebates.
But once you SELL those credit card purchase rebates, which are not given in cash, for more than the bank will buy them from you, that might be a taxable activity.

We didn't even touch on the subject of sign-up bonuses.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline Dan

  • Administrator
  • Dansdeals Lifetime 50K Diamond Elite
  • **********
  • Join Date: May 2008
  • Posts: 67598
  • Total likes: 16909
  • DansDeals.com Hat Tips 16442
  • Gender: Male
    • View Profile
  • Location: CLE
  • Programs: UA GS, AA EXP, DL Dirt, Hyatt Glob, Fairmont Lifetime Plat, DD Diamond, Blocked By @NeriaKraus
Re: FBI Raids Orthodox Homes
« Reply #1025 on: July 07, 2017, 12:16:27 PM »
I hear your argument, but I would counter, that once you got the rebate which in this case in not in the form of cash/currency, but rather something else (a commodity?), and now you sell it for more than the bank would credit you for it (IINM Chase allows you to use UR at a value of 1 cent towards your balance) which could be considered true FMV, as T&C don't allow selling, the difference between what the bank would give you for it, and what you sold it for could be a capital gain.
And AMEX/Chase used to sell their points for 2.5 cents each, so it's actually below market value.
Airlines will 1099 you for 2 cents per mile, again, you're selling that commodity at below market value.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline Dan

  • Administrator
  • Dansdeals Lifetime 50K Diamond Elite
  • **********
  • Join Date: May 2008
  • Posts: 67598
  • Total likes: 16909
  • DansDeals.com Hat Tips 16442
  • Gender: Male
    • View Profile
  • Location: CLE
  • Programs: UA GS, AA EXP, DL Dirt, Hyatt Glob, Fairmont Lifetime Plat, DD Diamond, Blocked By @NeriaKraus
Re: FBI Raids Orthodox Homes
« Reply #1026 on: July 07, 2017, 12:16:46 PM »
We didn't even touch on the subject of sign-up bonuses.
It's a purchase rebate on your first $1K-$5K of spending.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline ChaimMoskowitz

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Jun 2014
  • Posts: 6738
  • Total likes: 1097
  • DansDeals.com Hat Tips 1
  • Gender: Female
    • View Profile
Re: FBI Raids Orthodox Homes
« Reply #1027 on: July 07, 2017, 12:17:07 PM »
The form of the rebate is meaningless. Once you sell that rebate you have a tax issue.

Also remember most points/miles have no value so the whole amount you receive is going to be an issue.
« Last Edit: July 07, 2017, 12:20:40 PM by ChaimMoskowitz »
I just found a new supply of forks!

Offline ExGingi

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Nov 2015
  • Posts: 15618
  • Total likes: 7711
  • DansDeals.com Hat Tips 19
    • View Profile
  • Location: 770
  • Programs: בשורת הגאולה. From Exile to Redemption. GIYF. AAdvantage Executive Platinum®
Re: FBI Raids Orthodox Homes
« Reply #1028 on: July 07, 2017, 12:19:37 PM »
And AMEX/Chase used to sell their points for 2.5 cents each, so it's actually below market value.
Airlines will 1099 you for 2 cents per mile, again, you're selling that commodity at below market value.
You are making a valid argument, but there are arguments to counter that. If it ever went to tax court, which I doubt it will, it would be interesting to see how true valuation experts will chime in on this.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline David Smith

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Jun 2015
  • Posts: 8075
  • Total likes: 212
  • DansDeals.com Hat Tips 13
    • View Profile
Re: FBI Raids Orthodox Homes
« Reply #1029 on: July 07, 2017, 12:27:06 PM »
It's a purchase rebate on your first $1K-$5K of spending.
As mentioned, RT makes that interesting.
Who do you think you are fooling? You think you are going to pull a quick one on your Creator? Good luck with that.
JTZ

Offline David Smith

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Jun 2015
  • Posts: 8075
  • Total likes: 212
  • DansDeals.com Hat Tips 13
    • View Profile
Re: FBI Raids Orthodox Homes
« Reply #1030 on: July 07, 2017, 12:27:47 PM »
You are making a valid argument, but there are arguments to counter that. If it ever went to tax court, which I doubt it will, it would be interesting to see how true valuation experts will chime in on this.
It has, iinm.
Who do you think you are fooling? You think you are going to pull a quick one on your Creator? Good luck with that.
JTZ

Offline ChaimMoskowitz

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Jun 2014
  • Posts: 6738
  • Total likes: 1097
  • DansDeals.com Hat Tips 1
  • Gender: Female
    • View Profile
Re: FBI Raids Orthodox Homes
« Reply #1031 on: July 07, 2017, 12:32:26 PM »
PSA: Anyone involved in these games please seek competent legal advice.
I just found a new supply of forks!

Offline Dan

  • Administrator
  • Dansdeals Lifetime 50K Diamond Elite
  • **********
  • Join Date: May 2008
  • Posts: 67598
  • Total likes: 16909
  • DansDeals.com Hat Tips 16442
  • Gender: Male
    • View Profile
  • Location: CLE
  • Programs: UA GS, AA EXP, DL Dirt, Hyatt Glob, Fairmont Lifetime Plat, DD Diamond, Blocked By @NeriaKraus
Re: FBI Raids Orthodox Homes
« Reply #1032 on: July 07, 2017, 12:34:58 PM »
PSA: Anyone involved in these games please seek competent legal advice.
+1
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline ExGingi

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Nov 2015
  • Posts: 15618
  • Total likes: 7711
  • DansDeals.com Hat Tips 19
    • View Profile
  • Location: 770
  • Programs: בשורת הגאולה. From Exile to Redemption. GIYF. AAdvantage Executive Platinum®
Re: FBI Raids Orthodox Homes
« Reply #1033 on: July 07, 2017, 12:35:04 PM »
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline Menachem613

  • Dansdeals Lifetime Platinum Elite
  • *******
  • Join Date: Jun 2012
  • Posts: 1120
  • Total likes: 61
  • DansDeals.com Hat Tips 0
  • Gender: Male
    • View Profile
  • Location: NYC
Re: FBI Raids Orthodox Homes
« Reply #1034 on: July 07, 2017, 12:41:47 PM »
You buy something for $100.
A 2% CB card gives you $2 cash back, non-taxable purchase rebate.
A 2mpd card gives you 2 miles as a purchase rebate. You sell to a broker for $3. Why is that $3 not a purchase rebate from your $100 purchase, just like the cash back is? I'd argue it is.

In your first example, you now have a $98 basis in the item you bought. No taxable income unless you sell the item for more than $98.

In your second example, you have a $100 basis that needs to be allocated between the item acquired and the miles received. How much to allocate to the miles is subject to debate. Once you have allocated the $100 accordingly, you have no taxable income unless you sell the item or miles ands the amount received exceeds the allocated basis.
« Last Edit: July 07, 2017, 12:55:51 PM by Menachem613 »

Offline yitzf

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Mar 2011
  • Posts: 2623
  • Total likes: 52
  • DansDeals.com Hat Tips 4
    • View Profile
Re: FBI Raids Orthodox Homes
« Reply #1035 on: July 07, 2017, 12:49:08 PM »
In your first example, you now have a $98 basis in the item you bought. No taxable income unless you sell the item for more than $98.

In your second example, you have a $100 basis that needs to be allocated between the item acquired and the miles received. How much to allocate to the miles is subject to debate. Once you have allocated the $100 accordingly, you have no taxable income unless the amount received exceeds the allocated basis.

^this

Offline Mountain Man

  • Dansdeals Platinum Elite + Lifetime Gold Elite
  • ******
  • Join Date: Dec 2013
  • Posts: 892
  • Total likes: 34
  • DansDeals.com Hat Tips 10
    • View Profile
  • Location: Colorado
Re: FBI Raids Orthodox Homes
« Reply #1036 on: July 07, 2017, 01:15:52 PM »
Maybe special-needs children (whose families were targeted), incur higher costs because Medicaid pays for their therapy and their aides. Those costs are still high for recipients who have an aide at home 24/7 and multiple therapy sessions a week.
I don't think 70k over 3 years is that high. If you every look at how much a delivery without complications costs before insurance "disallowances" you can be talking in the area of 50k. It's possible that these numbers being thrown around are whole numbers before the traditional 80-95% disallowance on a particular charge. Medical reimbursement is an interesting area where what is billed and what is paid often have no semblance to each other. Not saying these people are innocent, I just think that the numbers being thrown around are pumped up to make their sins look more egregious.
Quote from: JTZ link=topic=10531.msg1695873
If you never had to eat crow then you lived one boring life.

Offline Mountain Man

  • Dansdeals Platinum Elite + Lifetime Gold Elite
  • ******
  • Join Date: Dec 2013
  • Posts: 892
  • Total likes: 34
  • DansDeals.com Hat Tips 10
    • View Profile
  • Location: Colorado
Re: FBI Raids Orthodox Homes
« Reply #1037 on: July 07, 2017, 01:27:59 PM »
You buy something for $100.
A 2% CB card gives you $2 cash back, non-taxable purchase rebate.
A 2mpd card gives you 2 miles as a purchase rebate. You sell to a broker for $3. Why is that $3 not a purchase rebate from your $100 purchase, just like the cash back is? I'd argue it is.
Because there is a conversion occurring/ the character of the asset is changing. I still think it's a grey area and shouldn't be taxable but I can see how an IRS case could be brought because you aren't making the transfer in-kind. I doubt a case would likely be brought unless it was a slam dunk for the IRS because they wouldn't want to set precedent which could come back to haunt them. But I'm not a tax accountant.

But then you could also argue that points often can be converted to cash or miles at the card level. I think that's why this is an area that IRS doesn't want to get involved in. To much work and risk for very little reward.
Quote from: JTZ link=topic=10531.msg1695873
If you never had to eat crow then you lived one boring life.

Online aygart

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: May 2008
  • Posts: 17396
  • Total likes: 14333
  • DansDeals.com Hat Tips 14
    • View Profile
    • Lower Watt Energy Brokers
  • Programs: www.lowerwatt.com
Re: FBI Raids Orthodox Homes
« Reply #1038 on: July 07, 2017, 01:34:02 PM »
PSA: Anyone involved in these games please seek competent legal advice.
+1000000 as I have written above. Even if the end result is an acquittal you do not want to go through the process of needing to argue this in court.
Feelings don't care about your facts

Offline Toasted

  • Dansdeals Lifetime Platinum Elite
  • *******
  • Join Date: Oct 2013
  • Posts: 1071
  • Total likes: 222
  • DansDeals.com Hat Tips 13
    • View Profile
Re: FBI Raids Orthodox Homes
« Reply #1039 on: July 07, 2017, 01:40:04 PM »
+1000000 as I have written above. Even if the end result is an acquittal you do not want to go through the process of needing Dan to argue this for you in court.
ftfy