Exclusion of Income Under Claim of Right Doctrine

Elliot Pisem and David Kahen were published in the New York Law Journal with a timely analysis of the Seventh Circuit’s recent decision involving Hyatt’s customer loyalty program.

Their article highlights two key takeaways:

• The Court of Appeals held that the “claim of right” doctrine may support exclusion of certain receipts from income—an argument the United States Tax Court had not addressed.
• The court also disagreed with the Tax Court’s narrow interpretation of the trading stamp regulation, opening the door to its application where rewards are redeemable for intangible property.

Read their full analysis here.