Hyatt Meets Friendly Court in IRS Lawsuit Over Rewards Program

The Seventh Circuit scrutinized the IRS’ case that payments Hyatt Hotels Corp. made to subsidiaries should be included in its income, given prior case law.

In oral arguments Tuesday, the US Court of Appeals for the Seventh Circuit examined how the Illinois-based hotels chain controls the fund it uses as the backbone of its customer rewards program, which the IRS hopes to see treated as income. Judge Thomas L. Kirsch appeared ready to re-examine the US Tax Court’s 2023 decision in favor of the IRS because it was based on Hyatt’s perceived benefits from the fund, when it should have ...