Konstantin Anikeev, an experimental physicist, assembled everything he needed for an inquiry far outside his field. His materials included American Express cards, the government’s view that credit-card rewards aren’t income, and his own willingness to spend time buying gift cards and money orders. He pulled the concept from personal-finance websites: Exploit the difference between unlimited 5% rewards and lower fees on gift cards and money orders. It (mostly) worked.
“I was really shocked by the outcome of the case. To me, this seems clearly to be income,” Ms. Hoffer said. “At the end of the day, does this taxpayer have an accession to wealth? The answer is clearly yes.”