(Reuters) – American Express Co pitched its business clients a tax break which may have skirted tax laws, the Wall Street Journal reported on Monday, citing people familiar with the matter and documents reviewed by it.
The tax break strategy was based on a “shaky interpretation” of how tax law applies to reward points, the report said, adding that the pitch helped the credit card issuer earn billions of dollars in transaction volume since at least 2018.
AmEx did not immediately respond to a Reuters request for comment.
In July, a whistleblower filed a report with the Internal Revenue Service, alleging the company had knowingly persuaded its business-owning clients to underreport their income and taxes, the WSJ reported.
AmEx discovered the pitch through internal channels and has hired a law firm to investigate the issue, the report said citing a company spokesman, who added that AmEx has terminated, disciplined and compensated some of its employees and adjusted their compensation plans.
(Reporting by Sohini Podder in Bengaluru; Editing by Anil D’Silva)
