There have also been few court decisions regarding the taxation of frequent flyer miles. In Charley v. Commissioner, 91 F.3d 72 (9th Cir. 1996), aff'g and rev'g 66 T.C.M. (CCH) 1429 (1993), the Ninth Circuit Court of Appeals affirmed a Tax Court decision holding that a corporate president was required to include in his gross income the value of frequent flyer miles.
and, as to your point in the rule cited, "Accrued Points and Miles do not constitute property of the Member" although a good point made, I really don't know anyone who has a MR account with accrued miles in it, do you?
Originally Posted by
RogerD408
MR pretty much matches every other reward program I've seen. Besides, once you assign "value" you may run afoul of taxation laws (hence the use of points/miles vs $s), at least here in the US. This "no ownership" provision was implemented exactly for this reason. The IRS tried to tax award programs but now since you don't "own" anything, they can't tax you on it (would it be a capital loss when a program devalues their program?). Even employers attempted to claim ownership of rewards for company-paid activities. Yes, you may have exclusive use, but no title.