Originally Posted by HKG_Flyer1
This seems kind of bizarre. Why did AA assign such an realistically high value to the tickets? Did they have to follow an obscure, unrealistic IRS valuation methodology? Could the recipient argue to the IRS that the 1099 is just flat out wrong?
Yes, this thread referenced earlier highlights that you can get the IRS to accept an alternative amount on the 1099 if you have good supporting documentation. This is probably a case where it isn't too hard to provide supporting documentation. E.g., printouts from AA.com showing perhaps the cheapest one-way economy flight and the most expensive (discounted of course) one-way economy flight -- maybe they'd accept an average of the two x 12? Whatever you come up with it would be
way less than $2,200 each!
http://www.flyertalk.com/forum/showthread.php?t=444801