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Frequent Flyer Miles Attributable to Business or Official Travel |
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The IRS issued Announcement 2002-18, which talks about frequent flyer miles. Major airlines offer programs where individuals earn frequent flyer miles. Questions have been raised concerning the taxability of frequent flyer miles or other promotional items that are received as the result of business travel and used for personal purposes.
There are numerous technical and administrative issues relating to these benefits on which no official guidance has been provided. Because of this, the IRS has not pursued a tax enforcement program with respect to promotional benefits such as frequent flyer miles.
Consistent with prior practice, the IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer's business or official travel. Any future guidance on the taxability of these benefits will be applied prospectively.
For information regarding this notice, call 202-622-3477. Alternatively, taxpayers may transmit comments electronically via the following e-mail address: Notice.Comments@irscounsel.treas.gov. Please include "Announcement 2002-18" in the subject line of any electronic communications. |
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