Amtrak Mastercard on Chase site seemed to disappear.

[George K]

http://www.irs.gov/pub/irs-drop/a-02-18.pdf

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, including issues relating to the timing and valuation of income inclusions and the basis for identifying personal use benefits attributable to business (or official) expenditures versus those attributable to personal expenditures. Because of these unresolved issues, the IRS has not pursued a tax enforcement program with respect to promotional benefits such as frequent flyer miles.



[SIZE=13pt]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. [/SIZE]

[SIZE=13pt]This relief does not apply to travel or other promotional benefits that are converted to cash, to compensation that is paid in the form of travel or other promotional benefits, or in other circumstances where these benefits are used for tax avoidance purposes. [/SIZE]

But that might change: http://taxfoundation.org/blog/irs-considering-change-tax-treatment-travel-loyalty-points

Gary Leff of the View from the Wing blog digs into hints that something is coming soon from the IRS on taxation of loyalty points. Currently, airline and hotel companies award miles and points to their customers and record it on their books as a liability. Tax is not due until the transaction is finalized when the customer redeems them (or the points expire).

Leff speculates that the IRS will want to change the timing to move the taxation earlier, perhaps when the points are awarded. He’s not sure, though, because although the IRS has talked about “changes to loyalty program accounting methods” as a priority for 2014, it has not offered any details about what it is thinking. The travel industry for their part sent a pre-emptive letter to the Treasury Department urging caution.

There are two reasons the IRS should be cautious here. The first is that the negatives of such a rule (potential chilling effect on successful marketing programs) outweigh the positives (the IRS gets the same amount of tax revenue, just earlier).

Second, and more problematically, taxing points and coupons when they are awarded rather than when they are redeemed means taxing revenue from transactions that have not actually happened (yet). If they never happen – if the points or coupons are lost or expire or are simply never used – it means a tax was paid on a transaction that never occurred.

 

[Devil's Advocate]

If IRS guidance on taxation of exchangeable points changes substantially there will be plenty of noise on the matter. It will not be something that slips by unnoticed. For as long as loyalty programs have been awarding points they have not been taxed directly unless and until they were eventually exchanged for a tangible good or service. Unless your favorite loyalty program begins filing 1099's on your behalf I wouldn't worry about it too much. My guess is that any near term changes will target large lump sum bonuses rather than incremental earnings.

 

[newlatidude]

The ideal would be if AGR notifies us, when they are ready, that we will be receiving new cards that will replace our current AGR cards. No fuss. Like Jim Hudson, we are retirees on a small fixed income, and have cards from our local credit union. If all else fails (or in the interim between programs), we'll go back to using those. If we stop getting points with our Chase cards, back they go to Chase, with a letter.

The only thing that really worries me, is that Hubby says some airline (he can't remember which one) just flat discontinued their program for rewards points, and it was determined by the courts that the points already earned had no value. Pfffftt! Gone!

For now, I am just sitting tight and not buying any more points (already bought the max + bonus for this year, and redeemed them for the Big Trip next fall, ha!).

Although I'm well immersed in the airline FFP world, I'm not familiar with what airline you may be referencing. But in any case, it's not that the points have no value, but rather that most loyalty programs have it in their T&Cs that the miles/points you earn remain the property of the program and you as the member have no property right to those miles/points. They also usually have language that they can change or terminate the program at will, with no recourse by members.

Regardless, I don't see any reason for worry here. The possible change of the AGR credit card to another bank (or even ending of an AGR card altogether), doesn't indicate the AGR program itself is in danger of ending.

If AGR switches to a different bank for its affiliate credit card, the other bank wouldn't just send you a new card unless you applied for it - which would be a good idea as you'd likely get another signup bonus. As to how long your Chase AGR card would be retained as an AGR card, it would depend on what AGR has negotiated with Chase. From past experience in similar changes with airline FFPs, it could be a short time or a long time, hard to tell.

http://www.irs.gov/pub/irs-drop/a-02-18.pdf

[SIZE=13pt]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, including issues relating to the timing and valuation of income inclusions and the basis for identifying personal use benefits attributable to business (or official) expenditures versus those attributable to personal expenditures. Because of these unresolved issues, the IRS has not pursued a tax enforcement program with respect to promotional benefits such as frequent flyer miles.[/SIZE]



[SIZE=13pt]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. [/SIZE]

[SIZE=13pt]This relief does not apply to travel or other promotional benefits that are converted to cash, to compensation that is paid in the form of travel or other promotional benefits, or in other circumstances where these benefits are used for tax avoidance purposes. [/SIZE]

But that might change: http://taxfoundation.org/blog/irs-considering-change-tax-treatment-travel-loyalty-points

Gary Leff of the View from the Wing blog digs into hints that something is coming soon from the IRS on taxation of loyalty points. Currently, airline and hotel companies award miles and points to their customers and record it on their books as a liability. Tax is not due until the transaction is finalized when the customer redeems them (or the points expire).

Leff speculates that the IRS will want to change the timing to move the taxation earlier, perhaps when the points are awarded. He’s not sure, though, because although the IRS has talked about “changes to loyalty program accounting methods” as a priority for 2014, it has not offered any details about what it is thinking. The travel industry for their part sent a pre-emptive letter to the Treasury Department urging caution.

There are two reasons the IRS should be cautious here. The first is that the negatives of such a rule (potential chilling effect on successful marketing programs) outweigh the positives (the IRS gets the same amount of tax revenue, just earlier).

Second, and more problematically, taxing points and coupons when they are awarded rather than when they are redeemed means taxing revenue from transactions that have not actually happened (yet). If they never happen – if the points or coupons are lost or expire or are simply never used – it means a tax was paid on a transaction that never occurred.

The second citation you link to doesn't portend a change to taxing the earnings of loyalty program members, i.e., not a change to the IRS statement above from 2002. Rather, it's a potential change to the tax treatment - or the timing of taxes - on the loyalty programs themselves. While this would probably incur more costs for the programs, and result in some sort of devaluation, it wouldn't affect individuals' tax liability for miles/points they earn.

 

[Linda T]

Chase credit cards do allow you to close and reopen accounts and get the bonus. We've done it with the Sapphire Preferred. It says , not available to "previous cardmembers of this consumer credit card [also business credit card for Ink] who received a new cardmember bonus for this consumer credit card within the last 24 months."

I'm hoping that the Ultimate Rewards will still be transferable since I'm working on my spend for my Ink card. I'll be pretty upset if I spend $5,000 on it and get the UR bonus and can't transfer it to AGR. Worse case scenario is I can use the points for hotels I guess. I assume that as long as the AGR card is paying the bonus they'll recognize the URs, but nothing's a guarantee in this life.

 

[George K]

Checked my balance through chase.com this evening. Here's what it showed for my Amtrak MC:



Where the arrow is is where it used to say "Amtrak Guest Rewards".

 

[Ryan]

It's still there for me.

 

[oregon pioneer]

I still see the AGR logo when I log into chase.com.

 

[George K]

Must've been a glitch, because I see it now.

Apologies.

 

[CHamilton]

Chase kills the Amtrak card. Why you might care…

 

[the_traveler]

It just said the card is not being offered to new cardholders, not that it was gone for good! And note that this blog entry was only for transfers to Choice Hotels.

Let's not jump to any conclusions yet!

 

[Devil's Advocate]

So we went from jumping to conclusions to grasping at straws. I guess you could say that the Chase AGR is a zombie card. It's neither completely alive nor completely dead.

 

[me_little_me]

Just for the heck of it, report your card lost in July and see what they do. I bet they'll send you a replacement card with an expiration date when they intend to switch things really off and most likely move everyone over to something else, unless of course Amtrak is discontinuing the AGR affinity credit card program completely.

My card was compromised last Friday. On Monday I had a new Chase Amtrak card. Same expiration date (2017).

While I am glad Chase is fast and efficient in solving issues, my loyalty is to Amtrak points, not Chase cards so if they separate, Chase gets a letter to close the account and I'll jump to the new Amtrak partner if there is one.

Agghhh! Would you believe it? On the 16th of March, I got my new card. On Sunday, the 29th, less than two weeks later, the new card was also compromised. The first was used by someone in the Atlanta area at a supermarket while the same day I was using it at home in NC. The second was used by someone at a supermarket in VA on the same day I was using it on an AGR trip in New Mexico.

 

[Lakeshore]

Schrodinger's Card?

 

[jis]

Agghhh! Would you believe it? On the 16th of March, I got my new card. On Sunday, the 29th, less than two weeks later, the new card was also compromised. The first was used by someone in the Atlanta area at a supermarket while the same day I was using it at home in NC. The second was used by someone at a supermarket in VA on the same day I was using it on an AGR trip in New Mexico.

So what shady outfit did you use your card with in those two weeks?
I have not had my AGR card compromised in over 5 years now! They did proactively send me a new card after the Home Depot and Target fiascoes, but there was no misuse of my card even then.

 

[Devil's Advocate]

Agghhh! Would you believe it? On the 16th of March, I got my new card. On Sunday, the 29th, less than two weeks later, the new card was also compromised. The first was used by someone in the Atlanta area at a supermarket while the same day I was using it at home in NC. The second was used by someone at a supermarket in VA on the same day I was using it on an AGR trip in New Mexico.

So what shady outfit did you use your card with in those two weeks?

I've had cards with more fraudulent purchases than legitimate purchases. I've even had cards that were used fraudulently before they ever reached my mailbox. Considering the utterly useless "security" features of US based cards I'd say the processing network itself is what's shady.

 

[jis]

I must just have been incredibly lucky then. In the last 6 years I have had exactly two fraudulent uses. I guess YMMV.

 

[Devil's Advocate]

I must just have been incredibly lucky then. In the last 6 years I have had exactly two fraudulent uses. I guess YMMV.

These days the bulk of the world's credit card fraud occurs in the US. In 2012 the U.S. accounted for 23.5% of payment card volume but 47.3% of payment card fraud. In 2013 the cost of U.S. payment card fraud was roughly $7.1 billion while the rest of the world combined was around $6.8 billion. US consumers pay some of the highest transaction fees among industrialized economies, in part because our fraud prevention systems are a total joke. Vectors for credit card fraud are well understood. Lack of proper security features and heavy reliance on easy credit make US cards a uniquely inviting target to hackers worldwide. Massive data breaches followed by relatively minor regulatory fines are becoming routine. So yeah it sounds like you're one of the lucky folks who has yet to even notice there's a problem here.

 

[PRR 60]

My card expires this May. Typically, a card with a new expiration would come out mid to late April for a May expiration. It will be interesting to see what happens.

My new AGR card arrived yesterday, valid through May 2018. Now, that does not mean it will remain an AGR card for three years, or even three months, but at least for now they are still issuing new AGR cards to existing cardholders.

 

[user 1215]

My card expires this May. Typically, a card with a new expiration would come out mid to late April for a May expiration. It will be interesting to see what happens.

My new AGR card arrived yesterday, valid through May 2018. Now, that does not mean it will remain an AGR card for three years, or even three months, but at least for now they are still issuing new AGR cards to existing cardholders.

Ditto.

 

[Bob Dylan]

Glad to see this since my card expires in May and I have several monthly bills done on AUTO- PAY with the AGR Card!

FYI: my account closes on the 17th and my AGR Points posted to my account on the 18th!!!

 

[NW cannonball]

I must just have been incredibly lucky then. In the last 6 years I have had exactly two fraudulent uses. I guess YMMV.

I've had about 7 cards last two decades or so. Including Chase AGROne fraudulent charge back in the 90's .

"Lucky" don't think so.

"Prudent" probably.

Thinking the "card fraud" topic belong elsewhere, unless specifically Amtrak AGR.

Thanks.

 

[Ryan]

Given the number of breaches, yes, lucky is the right word for it.

 

[jis]

Given the number of breaches, yes, lucky is the right word for it.

Perhaps especially so since I have used some of these cards, but not AGR, since it charges extra for foreign exchange conversion, in very high risk countries like India, Thailand and Russia during this period.

 

[George K]

Given the number of breaches, yes, lucky is the right word for it.

Sigh...

Just got a text from Chase about my AGR MC.

Seems someone charged something on my card ... in Canada. Since I live near Chicago, that's highly unlikely. I've had lost cards used in the past, but nothing like this.

New cards coming...

 

[TinCan782]

Given the number of breaches, yes, lucky is the right word for it.

Sigh...

Just got a text from Chase about my AGR MC.

Seems someone charged something on my card ... in Canada. Since I live near Chicago, that's highly unlikely. I've had lost cards used in the past, but nothing like this.

New cards coming...

In my experience, Chase has been very proactive regarding fraudulent use. Once with my AGR MasterCard and once with my debit card. Both times, the cards were in my wallet. With the AGR credit card, I received an email asking me to verify or deny a pending purchase. The account was closed and a new card sent. With the debit card, someone made a purchase at a location less than 20 miles from me. That notification was by telephone. The money was replaced pending outcome of an investigation.

BTW, Chase will not tell you what triggered the "red flag".