What’s The Citibank Airline Miles Settlement About
The lawsuits allege that Citibank did not adequately disclose to customers that Citibank would report the taxable value of the promotional American Airlines miles (AA miles) awarded to customers as income to the IRS by issuing AA Miles Form 1099s, that the AA miles do not constitute reportable income, and that Citibank overvalued the AA miles for reporting purposes. We have posted about these offers in the past, where you could earn as much as 50K AA miles for opening an account. Citibank denies these allegations; however, in order to avoid the expense, inconvenience and distraction of continued litigation, Citibank has agreed to the Settlement described herein.
If you received notice of the Settlement from a postcard addressed to you, then you likely are a Settlement Class Member. All persons or entities in the United States who received an IRS Form 1099 from Citibank as a result of opening a Citibank deposit account and receiving American Airline miles through Citibank promotions in which Citibank valued the American Airline miles at 2.5 cents per mile, during the period between January 1, 2009 and July 13, 2017. “Settlement Class Member” is defined as any person in the Settlement Class who does not opt out of the Settlement. If you are still not sure whether you are included, you may write the Settlement Administrator at Hirsch Airline Miles Settlement, c/o Rust Consulting, Inc., Settlement Administrator – 5671, P.O. Box 2599, Faribault, MN 55021-9599 or you may call 1-866-403-0679 (toll-free) for more information.
What Products Are Included?
- Citibank deposit accounts with miles bonuses that resulted in Form 1099s being issued
How Much Do I Get?
Citibank has agreed to pay:
- the maximum sum of $1,750,000 to satisfy settlement awards paid on a claims-made basis to Settlement Class Members who submit valid and timely claims;
- award of attorneys’ fees, costs and expenses to Settlement Class Counsel not to exceed $1,200,000, to be approved by the Court (not to come out of settlement awards);
- service awards to the Class Representatives in an amount to be approved by the Court (not to come out of settlement awards) and
- the reasonable costs of notice and administration of the Settlement (not to come out of settlement awards).
The exact amount of the settlement award will depend on each Settlement Class Member’s unique circumstances and the amount of claims submitted. Those who who received a 1099 will receive a settlement award calculated by multiplying up to 70% of the reported income by the Settlement Class Member’s applicable federal tax rate, subject to adjustment based on the amount of claims submitted. For example, if a Settlement Class Member’s federal tax rate was 35% and the amount of income attributable to receipt of AA Miles on his/her AA Miles Form 1099 was $1,000, his/her Settlement Award would be up to $245.
Settlement Class Members who do not affirm that they reported and paid taxes on the income attributable to the receipt of the AA miles will be eligible to receive a settlement award of up to $40. If the amount of settlement awards would exceed the sum of $1,750,000, the settlement awards will be reduced on a pro rata basis.
You must submit a claim by November 27, 2017.
Do Not Submit False Claims
Please do not submit fraudulent claims for these settlement rebates. It takes money away from those who deserve a reimbursement, and furthermore it is illegal. You’re usually required to acknowledge something along these lines:
I certify under penalty of perjury under the laws of the United States that all of the information provided on this Claim Form is true and correct to the best of my knowledge.
- File claim here
- Rebate: Up to 70% of the reported income, or $40 if you didn;t pay taxes on AA miles
- Proof of Purchase: No
- Settlement Pool: $1,750,000
- Deadline: 11/27/2017
- Read Settlement Details Here