Rakeback, taxes, and an argument for the IRS

[Tilt]

This is not a post for those of you who intend to break the law. Trolls and your stupid comments are not appreciated here.

I have been thinking about rakeback, and I think it is not taxable income. I believe it is arguably a purchase price adjustment, much like a mail-in rebate. A discount on goods and services if reasonable and still within the boundaries of fair market value for that good or service is not taxable income.

I am not a CPA, but I did consult a tax attorney on this point. I suggest to those of you that try to comply that you account separately for your rakeback and exclude it. Even if the IRS audits you and calls it income, the argument is reasonable enough to avert penalties in my opinion.

This does not apply to bonuses, which are pretty clearly income IMO.