Paranoid? Amazon Gift Cards

[NJWxMan]

A number of ABPN sponsored CME companies sponsor free Amazon gift cards when you purchase their CME service. Most hospitals provide $1000-$5000 yearly for CME. I've been very reluctant to purchase services that offer the Amazon gift cards since it seems like "Robbing Peter to pay Paul." In short, the hospital pays $2000 for my CME service, but then I would get $1000 free towards Amazon. Is this ethical? Anyone purchase these CME services?

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[psychapp121]

A number of ABPN sponsored CME companies sponsor free Amazon gift cards when you purchase their CME service. Most hospitals provide $1000-$5000 yearly for CME. I've been very reluctant to purchase services that offer the Amazon gift cards since it seems like "Robbing Peter to pay Paul." In short, the hospital pays $2000 for my CME service, but then I would get $1000 free towards Amazon. Is this ethical? Anyone purchase these CME services?

I don’t understand..why would this be unethical

 

[Sushirolls]

You are paying for a service and they are competing for your patronage with a gimmick gift. Seems like a business model to me that might work.

No issues with stark laws as doesn't involve kick backs or referrals.

 

[splik]

Of course it's unethical. The whole thing is a scam. Though I would say it is the companies for the most part whose practices are questionable. That said, it is not illegal and I highly doubt your employer cares. That CME money is part of your compensation. The only benefit of receiving it as CME as opposed to salary is that you don't have to pay taxes on it. So whether you spend that CME money on going to a conference, or one of these dodgy packages with a 1K amazon gift card, I'm sure your employer could care less.

 

[psychapp121]

Of course it's unethical. The whole thing is a scam. Though I would say it is the companies for the most part whose practices are questionable. That said, it is not illegal and I highly doubt your employer cares. That CME money is part of your compensation. The only benefit of receiving it as CME as opposed to salary is that you don't have to pay taxes on it. So whether you spend that CME money on going to a conference, or one of these dodgy packages with a 1K amazon gift card, I'm sure your employer could care less.

what is unethical?

 

[clausewitz2]

what is unethical?

Skirting tax laws? CME money is parceled out as separate from salary compensation because just giving you more money would be taxed on a way that reimbursing professional educational expenses is not. These gift cards are a way of dodging tax incidence.

Also, you know, saying you are doing one thing while actually doing another, self-interested thing is seen as problematic in most ethical systems.

 

[psychapp121]

Skirting tax laws? CME money is parceled out as separate from salary compensation because just giving you more money would be taxed on a way that reimbursing professional educational expenses is not. These gift cards are a way of dodging tax incidence.

Also, you know, saying you are doing one thing while actually doing another, self-interested thing is seen as problematic in most ethical systems.

I don’t understand..the op is buying something using his allotted education allowance then they are giving him a gift card as a result..you want him to avoid buying something he wants because they’re going to give him a gift card?

 

[aim-agm]

I don’t understand..the op is buying something using his allotted education allowance then they are giving him a gift card as a result..you want him to avoid buying something he wants because they’re going to give him a gift card?

If I understand @clausewitz2 correctly, presumably the company is selling a product worth $1000 or less ($2000 price tag less $1000 gift card) and trying to get customers by using a kickback. The hospital is overpaying for the product so the customer can dodge taxes through the $1000 gift card.

 

[psychapp121]

If I understand @clausewitz2 correctly, presumably the company is selling a product worth $1000 or less ($2000 price tag less $1000 gift card) and trying to get customers by using a kickback. The hospital is overpaying for the product so the customer can dodge taxes through the $1000 gift card.

it doesn’t even matter..if I want a qbank for example I’m gonna use my education allowance money to get it and spend 2k on the qbank..I don’t care it’s free education money..if I get a 1k amazon gift card? eVEN BeTTER

 

[PikminOC]

I don't do CME with nonsense like that. They are overcharging. Just charge me $1000. I don't want the card

 

[PikminOC]

Does the cme course give you a 1099 for the card? Otherwise it's tax evasion

 

[Sushirolls]

Tax evasion? Credit card companies charge fees to businesses, or annual fees to card holders, but yet offer points/rewards/rebates to card holders for their purchases.

Should a credit card company issue a 1099 for the free flight you earn with United Airlines cards? Should Macy's offer a 1099 for their rewards? Should Visa/Costco offer a 1099 for their rebate checks they give?

Should businesses that use stamp cards and give a free coffee after buying 10 issue a 1099 for that free coffee?

 

[michaelrack]

technically it's tax evasion if the recipient does not report the gift card as income.:

https://www.southwestern.edu/live/files/6825-gift-cards-are-taxable-revised4pdf

Is a 1099 Required for Gift Cards? | Bankers Online

 

[michaelrack]

On a related note, I previously took a Beat the Boards course for Internal Medicine with a "Triple Trust Guarantee" I was expecting to fail and I called and asked them if the $1000 given for failure would be accompanied by a 1099; the sales person didn't know
(I ended up passing the IM MOC test)

 

[clausewitz2]

Tax evasion? Credit card companies charge fees to businesses, or annual fees to card holders, but yet offer points/rewards/rebates to card holders for their purchases.

Should a credit card company issue a 1099 for the free flight you earn with United Airlines cards? Should Macy's offer a 1099 for their rewards? Should Visa/Costco offer a 1099 for their rebate checks they give?

Should businesses that use stamp cards and give a free coffee after buying 10 issue a 1099 for that free coffee?

If you are paying someone with your money and they want to give you something back, whatever.

If your employer is paying someone with untaxed money for a specific service and they turn around and give you half of it as basically cash, your employer has just paid you in an untaxed fashion. Possibly without knowing it.

On my list of things to get worked up about it's waaaay down by the bottom but it is shady and if the amount was big enough and you got audited might be awkward.

 

[PikminOC]

Tax evasion? Credit card companies charge fees to businesses, or annual fees to card holders, but yet offer points/rewards/rebates to card holders for their purchases.

Should a credit card company issue a 1099 for the free flight you earn with United Airlines cards? Should Macy's offer a 1099 for their rewards? Should Visa/Costco offer a 1099 for their rebate checks they give?

Should businesses that use stamp cards and give a free coffee after buying 10 issue a 1099 for that free coffee?

Do credit card companies/Macys/etc give you a 1099 if its over 600$ in rewards? That's the law.

 

[Sushirolls]

Costco and their Visa rewards don't.

 

[clausewitz2]

Costco and their Visa rewards don't.

The more comparable situation is if the clerk at Costco let you open a Visa card with them on the condition that you hand all your reward points over to the clerk personally. It may be easier to see the problem framed that way. Party A pays out money intended solely for Party B on the direction of Party C, and instead Party C pockets half of it.

Again, no one is actually fooled by this, but as far as the IRS is concerned, the hospital is definitely asserting that no, that CME money is going only to CME providers to pay for CMEs.

 

[splik]

Do credit card companies/Macys/etc give you a 1099 if its over 600$ in rewards? That's the law.

credit card rewards do not constitute taxable income. They do not give you a 1099 and they aren't required to.

 

[clausewitz2]

credit card rewards do not constitute taxable income. They do not give you a 1099 and they aren't required to.

The IRS rightly regards them as just a somewhat complex discount. They are handing your money back to you. You are making a short-term interest-free loan to the issuer of the card.