Question

Which of the following is a reason why the IRS might have decided not to tax the value of frequent flier miles earned on airline tickets purchased for business use?

a) Frequent flier miles have negligible monetary value.
b) It is considered a fringe benefit.
c) IRS considers it too difficult to track.
d) Business-related expenses are generally not taxed.

Answer 1

The IRS might have decided not to tax the value of frequent flier miles earned on airline tickets purchased for business use because they are considered a fringe benefit and business-related expenses are generally not taxed.

Step-by-step explanation:

The reason why the IRS might have decided not to tax the value of frequent flier miles earned on airline tickets purchased for business use is d) Business-related expenses are generally not taxed. The IRS considers frequent flier miles earned on business trips to be a form of non-taxable fringe benefit provided by the employer. This is because they are seen as a reward for the business travel and not as actual income.