You're probably thinking of this position the IRS took with respect to miles earned on business travel but used for personal trips.

http://www.irs.gov/pub/irs-irbs/irb02-10.pdf

The bottom line is that although one could reasonably argue that miles earned on business trips are a form of wages paid to employees, the IRS has decided that it would be impractical to treat them as income. Thus, the miles come to the business traveller free of tax liability, even if later used for personal travel.

For the reasons discussed above, the IRS appears to agree that the convenience fee for tax payments is a deductible business expense to the extent that such payments relate to the tax liability of the business. I would interpret that to include the portion of one's 1040 balance due or estimated tax payments that relates to a trade or business (e.g., Schedule C).

To the extent the payment covers personal, non-business tax liability, the convenience fee is not deductible: "The IRS does not receive or charge any fees for payments. Additionally, the IRS cannot pay or reimburse any convenience fee to taxpayers. The fee is a non-deductible personal expense; however, it is a deductible business expense."

http://www.irs.gov/efile/article/0,,id=101316,00.html

If anyone relies on the above, and you end up owing the IRS a bunch of money, I'll refund everything you paid me for this analysis.

FWIW, I agree with all that you say. One ought not try to deduct the credit card fees for payments of "personal" personal tax obligations, but should be able to do so where "business" tax obligations are involved?

While the fees are not deductible with "personal" payments, the miles come no strings attached. When the fees are deductible because the payments are for "business" taxes, are the miles that come with those transactions without any strings attached too, so they can be used however one wishes, including for vacation travel? I expect the latter miles are also without strings because why should they be any different from redeemable miles earned through business travel and other uses of the credit card to pay business expenses, but that doesn't seem quite so certain to me.

If one owns a business that makes substantial tax payments, then they may have the opportunity to buy a substantial number of miles at as little as .75 cpm net after taxes, a damn good price. But do ask your accountant.

Maybe in 2007 more of them shall offer this.

Did AAdvantage MC Offer Double Miles?
 

I spoke to Citicards yesterday to ask for an extension of the double mileage offer from April for the payment of taxes through officialpayments.com.

They told me that there was never an offer of double miles.

They asked me to produce any proof of such an offer and implied that if I can, they will extend it.

Any idea of what's going on here?

Was there an AAdvantage Master Card double mileage offer?

If so, can anyone get me proof?

Many thanks!

I was the one who received double miles on my AA card for my tax payment. HOWEVER - I recently got this month's statement posted, and I had double miles on that one as well!

Since it was my first time using my AA Mastercard, I had assumed the double miles were specifically from the tax payment. Now it seems that all my miles are being double, although I have no idea why. I don't remember signing up for any specific promos, and no one else has mentioned it in the AA forum.

You are indeed one lucky guy.

I've seen the past discussions of double miles on tax payments using a Citi AA card, and I think people have confused this with the UA and *wood promos. I don't think there ever was a promo offered to the general public for tax payments made with a Citi AA card (other than the reduction in the convenience fee).

I'm sure someone will correct me if I'm wrong.

Regarding the Delta business AmEx card:

You have successfully enrolled. You can earn double miles on all eligible purchases from June 1 - August 31, 2006. So be sure to use your Card for all of your purchases.

To learn more about other great offers, visit www.americanexpress.com/deltaoffers.

Thank you for your continued Cardmembership.

The fine print indicates a maximum bonus through this offer of 20,000 miles. So, if you have the DL Amex business card, this can give you 2x miles for your upcoming estimated tax payment (or any other charges).

Has anyone received their double miles bonus from tax payments on their Starwood AmEx?? I have not received mine yet, and we paid our taxes on April 15th.

check this thread out:
http://www.flyertalk.com/forum/showthread.php?t=563080

Mine haven't posted yet either.

no problems paying taxes with UA Visa, right?
 

I think it a good deal to get UA miles at 1.245 cpm, but not at 2.49 cpm. I think I got all that I was due from my use of the card for that purpose back in April, including the extra measure of EQM for going for >$35K. No one has had any problem with this, that is not gotten all the RDM they were entitled to, have they? I am about to do it again for 6/15/06 tax payments. (Was this "double miles" for tax payment deal with the UA Visa around in previous years?)

Also, any definitive answer to the AA miles with Citibank question? Was there never an offer of bonus AA miles for paying taxes with the Citibank card, in particular double miles for a 1.99% "convenience fee"? That was just misinformation? (I don't have that card or collect AA miles, but did think about looking into this possibility, if indeed it ever was a possibility.)

And will someone please shout out when they see bonus miles post to their SPG accounts.

When one clicks on this link, they are told that the offer is now expired, so cannot see the details anymore. I had assumed that this one for paying taxes with the Citibank AAdvantage Mastercard was like the one for the UA Visa, giving double miles for the added "vigorish" or "convenience fee," and was even a bit better at 1.99% rather than 2.49%. But maybe I assumed double miles for the AA card like for the UA card, when in fact there was no such offer. (If that is true, then the UA offer is even more special, since nothing to rival it.)

Yes, my bonus posted to my account the following month after making the payment, on 4/14/2006.

I just made a payment because I needed a quick 2000 points to top off a hotel award, at 2 points/$.

Yeah, yeah, I know all about poor ratios and all that, but I needed the points quickly and it costs a lot less than a couple of hotel stays.

You say you "needed a quick 2000 points to top off a hotel award, at 2 points/$." Are you speaking about a payment made with the SPG card, and are you expecting 2 points per $1 of taxes paid and 2.49 cents of "convenience fee" per $1? If so, I think you may be disappointed because if I am not wrong that "double miles" offer for up to a $5K spend on taxes ended 4/17/06, and all you will see now is 1 point per $1 of taxes and 2.49 cents of "convenience fee."