Originally Posted by
daveland
I just got a call from Citi to alert me to the fact that they have issued me a 1099 to tax the value of all the Thank You Points I *REDEEMED* in 2011.
Not earned, not from a bonus, and not from the bank side - just points I got instead of a 1 or 2% cash back on my Citi Credit Cards and REDEEMED.
Can this possibly have any basis in IRS law? I don't see how as the points are in lieu of a cash rebate. I don't even know where to begin with my frustration from this call.
So if I redeem for more than $600 in a year in flights (or anything else) from TY, I need to pay taxes on that credit card rebate?!
Anyone else? I'm still waiting for the 1099 to come in the mail and I know I will be livid when I open it.
The fact that you received a phone call is an extraordinarily bad fact for others who received a Form 1099-MISC from Citi. Stand-alone Forms 1099-MISC were due to the recipient by January 31, with the IRS copy due to the government by February 28 (I guess the 29th this year). Presumably since Citi is sending them late, they are calling to minimize the number of people who would otherwise file based on the belief that they had received all 1099s and W-2s (those receiving Forms 1099-B wouldn't have received those yet, since an automatic extension was provided allowing the recipient copy to be sent in February).
The point I am making is that Citi's response to all of this criticism seems to be "Let's go find benefits we have provided other than frequent flier miles and send some 1099-MISCs to those recipients, also." I had hoped their response would have been, "Let's fix the mileage 1099s to reflect a more reasonable value and definitely not send out any more."
I know nothing about these ironically named Thank You points. Let everyone know if Citi is overvaluing them, also.
It really would be great if you explained how Thank You points work. It is strange that Citi would not issue a Form 1099-MISC when Thank You points are earned from a banking product, but do exactly that when frequent flier miles are "earned". If the Thank You point can only be valued based on redemption, why isn't the same true for an AA mile?