The IRS is mulling over excluding frequent flyer miles redeemed for awards, other than domestic travel, from the excise tax it applies to airfares.
This action would mean that miles redeemed for international flights, free hotel stays, and magazine subscriptions could be exempted from the excise tax. Currently, taxpayers pay an excise tax for all frequent flyer miles purchased and then must file a refund claim for the tax on the miles used for non-U.S. travel.
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