Checks, Credit & 1099-OID

[ShamanSaid]

Ever notice that most all corps and businesses will strictly issue you a check as a form of refund or payment?

I think I know the reason why - the check is a type of bonded promissory note payable on demand, unless post-dated; this is an "original issue" drawn upon your financial institution checking account.

This allows the issuer to 1099-OID the payment and get their money back from the IRS.

I think the best strategy is to PAY FOR EVERYTHING WITH CHECKS from now on. So later on you can 1099-OID and get your money back.

And with credit card accounts I see them as checking accounts as well and you draft out new issue from a ZERO balance account thus putting you in the negative or OVERDRAFT so that is why they get to charge you ridiculous rates beyond the scope of usury laws. They are letting you issue checks (in electronic form) out that they then cover and you pay the bill and they get to 1099-OID you on top of everything else because of the new original issues you keep generating with each use.

What about debit card accounts?

Originally Posted by ShamanSaid Ever notice that most all corps and businesses will strictly issue you a check as a form of refund or payment? I think I know the reason why - the check is a type of bonded promissory note payable on demand, unless post-dated; this is an "original issue" drawn upon your financial institution checking account. This allows the issuer to 1099-OID the payment and get their money back from the IRS. I think the best strategy is to PAY FOR EVERYTHING WITH CHECKS from now on. So later on you can 1099-OID and get your money back. And with credit card accounts I see them as checking accounts as well and you draft out new issue from a ZERO balance account thus putting you in the negative or OVERDRAFT so that is why they get to charge you ridiculous rates beyond the scope of usury laws. They are letting you issue checks (in electronic form) out that they then cover and you pay the bill and they get to 1099-OID you on top of everything else because of the new original issues you keep generating with each use.

Hi Shaman,
It's my understanding that not only checks written from an account can be OID'd but debt card charges as well. My question: Can cash withdrawals, both over-the-counter and ATM be OID'd?