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Hyatt Hotels Corporation v. Commissioner of Internal Revenue — Vacated and Remanded

The Seventh Circuit vacated the U.S. Tax Court's decision in Hyatt Hotels Corp. & Subsidiaries v. Commissioner of Internal Revenue (No. 13858-17) and remanded the case for further proceedings. The dispute concerns whether payments from third-party hotel owners into Hyatt's Gold Passport loyalty program fund, along with investment income and direct point sales, constituted taxable income to Hyatt. The IRS asserted that Hyatt should have reported this fund income and deducted redemption costs at the time of redemption. The appellate court found the tax court's analysis incomplete on the threshold question of whether these payments were Hyatt's income at all, declining to reach Hyatt's alternative argument that it was entitled to use the trading stamp method of accounting under Treasury Regulation § 1.451-4. Oral argument was held September 16, 2025.