Tickets From Overbooked Flights: Ethically Reportable Taxable Income or Free Gifts
Harrison and Joan were working on their income tax return and suddenly Harrison remembered free” ticket vouchers that he and Joan had received as compensation for giving up their airline seats on one of their trips. He had not been notified that the airline had reported these to the IRS, and he wondered if they were taxable income. Did they have to include them in their tax return?
- Explain economic income and the concept of taxable income as defined by the IRS.
- Understand the IRS concept of voluntary income tax.
- Analyze the business plan (profit) motivation for overbooking flights by airlines.
- Examine and evaluate the ethics/legality associated with tax avoidance.
- Examine and evaluate the ethics/legality associated with tax evasion.