Author Topic: FYI: Tax Court rules that points from certain MS are taxable.  (Read 2735 times)

Offline KSMH

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #60 on: February 24, 2021, 07:24:35 PM »
Article is written very well..
Ruling makes sense in my mind (based on reading the article), a MO is somewhat considered a cash equivalent..
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Offline Dan

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #61 on: February 24, 2021, 07:29:11 PM »
Attached is a comment from Atty Eric Green clarifying his perspective, he thought they would lose due to another reason that the IRS did not even try to argue.

Uploaded with tapatalkhttp://cloud.tapatalk.com/s/6036ee0a75833/AUD-20210224-WA0049.mp3
Just spoke with him, editing the post now.
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Offline KSMH

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #62 on: February 24, 2021, 07:45:03 PM »
Attached is a comment from Atty Eric Green clarifying his perspective, he thought they would lose due to another reason that the IRS did not even try to argue.

Uploaded with tapatalkhttp://cloud.tapatalk.com/s/6036ee0a75833/AUD-20210224-WA0049.mp3

His argument of why the IRS shall argue; he did it for profit and not as a rebate, due to no actual expense, I would like to differ, lets say a business spends 100 and gets back 2% as a rebate they still ask the IRS for 100 tax write off... if the IRS would argue what he said then every business will have to start deducting only 98%, this would literally make every transaction complex and require specific entry. The reasoning for IRS policy is most likely due to complexity (MR or CR are not actual cash...) of changing this.

I would not be surprised to see a change one day where points such as 2% cash back were to get taxed but MR would not....
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Offline Dan

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Offline aygart

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #64 on: February 24, 2021, 10:23:46 PM »
Article is written very well..
Ruling makes sense in my mind (based on reading the article), a MO is somewhat considered a cash equivalent..
The decision very specifically says this is not the reason
Feelings don't care about your facts

Offline aygart

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #65 on: February 24, 2021, 10:26:21 PM »
So I load 500 on the GC, load 500 on GD and one is taxable and the other is not. Like I said, this makes no sense.
Nothing new there. I would have been shocked if anyone other than the MSers really understood the whole thing. Definitely not the lawyers or the court.
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Offline KSMH

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #66 on: February 24, 2021, 10:26:41 PM »
The decision very specifically says this is not the reason
(based on reading the article),

 I guess I need to read the decision.
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Offline aygart

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #68 on: February 24, 2021, 11:22:17 PM »
I guess I need to read the decision.
"We note that the above holdings are not based upon the application of the cash equivalence doctrine but rather the incompatibility of the direct money order purchases and the debit card reloads with the IRS policy excluding credit card rewards for product and service purchases from income. These holdings are based on the unique circumstances of this case. We hope that respondent polices the IRS policy in the future in regulations or public pronouncements rather than relying on piecemeal litigation."
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Offline R.A.T.

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #69 on: February 25, 2021, 05:36:02 PM »
Is the income generated from MS taxable?


Offline R.A.T.

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Re: FYI: Tax Court rules that points from certain MS are taxable.
« Reply #71 on: March 07, 2021, 05:29:43 PM »
https://www.wsj.com/articles/he-got-300-000-from-credit-card-rewards-the-irs-said-it-was-taxable-income-11615125601?st=rrzes6sohjlrw59&reflink=article_copyURL_share
Fair article. The question remains if they went with the alternative argument that the income is taxable what would be the result? Was anything actually sold?