Re: Rakeback, taxes, and an argument for the IRS
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There's probably nothing specifically about rake rebates in the code. Therefore, there's probably room to argue that they fall into one of several existing categories. For example, when you get the 5th cup of coffee free, it's not earned income. So, I still think there's probably an argument that could be made.
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Yes you can make the argument. But if you look at the past cases for things like comps, airline miles, and the like it is pretty clear that you are not going to win. The arugment then comes do you have a good enough case to just have to pay taxes and not get major penalities (I think you still owe interest on underpayment no matter what but it has a been a while since I researched this). I have a feeling that will probably come down to scale. If you have 200K of rack back I have a feeling that is treated differently than if you had like 5k
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