Written by Paul B. Murray, CPA, ABV, CFF
A new 2011 reporting requirement has caused quite a stir among customers of the $85 billion behemoth Citigroup, Inc. It seems, under threat of unlimited penalties for failure to file forms 1099, Citi sent customers form 1099 Miscellaneous Income for the value of frequent flyer miles received when opening a new account.
The IRS somewhat addressed this issue ten years ago stating that it would not “assert” understatement of income for failure to report the value of frequent flyer miles. However, the powers that be at Citi decided better safe than sorry and issued the forms resulting in a class action lawsuit by disgruntled customers. For the full story click on the link below.
http://www.aicpa.org/publications/taxadviser/2012/august/pages/clinic-story-08.aspx
