Worth noting that the case is a Rule 155 case, which is why you don't see how much is ultimately owed. The court gave some guidelines and now the parties go back and do the calculations based on those guidelines. We may never know the final result unless the parties go back to court. Some of the guidelines were favorable to the taxpayers, and the law firm and Dan's Deals point that out. And of course the problem with any court case is that the court just addresses what the parties argue, and may not give a different answer if neither party gets it correct (if there is a correct answer). I always thought that if a person buys $1,000 worth of variable load cards, pays $11.90 in fees, gets a $50.60 credit on his reward credit card, he has a basis of $961.30 in those cards. If he uses those $1,000 of variable load cards to buy a $999 money order, he has a short-term taxable capital gain of $37.70 (he bought $999 for $961.30). But if he is just a regular person who did this transaction and used the $1,000 of variable cards to buy food, gas, clothing, he doesn't have any taxable income since he just gets a basis of $961.30 in the "regular" stuff he bought.
The IRS didn't argue for that gain in the court case, but seemed to simply have argued that the statement credit was taxable, presumably as a result of what the taxpayers did before and after getting the statement credit. Of course some would argue that since $1 is always worth $1, perhaps there was never any gain on the purchase of the money order (or the eventual use of the money order if the benefit somehow transferred from the variable load card to the money order). So maybe there was a reason the IRS didn't argue that a taxable capital gain exists.
Anyway, we may never really know how it turns out, but it is worth reading the thoughts of those who say the declaration of the case being a big win for the IRS to have been misleading.
https://www.dansdeals.com/points-tra...axable-income/
https://activerain.com/blogsview/563...tes-tax-court-