topic Re: Being asked by Amex for tax return? in Credit Cards

Being asked by Amex for tax return?

UtahNewbie — Mon, 15 Oct 2012 03:18:13 GMT

my background: I'm 21, arrived at U.S. last year (so I don't have a tax return now), credit history for eight months. I'm a college student now, I started a business of buying products on U.S. website and then selling the products to Chinese buyers two months ago.

I've had an Amex zync card for four months, I charged about $800 each month for the first two months. The third month,from when I started my little business, I charged about $1500 and paid if off before the due date. And the fourth month, I charged about $5500 for the first 20 days of this billing period and the balance is $4000 now.

Yesterday, I received a call from Amex financial review department, asking me to provide some files about my income or some tax return form of 2011. I told them that I didn't file the tax return last year because I didn't have any income by then( I know it is technically illegal). And Chinese buyers contacted me and paid me through some Chinese website like Ebay ( Taobao.com, if you have heard of it), I can provide them the transaction list on it, but they said it's not verifiable.

And they said they have to (regretfully) close my account next week.

My question:
1. Is it because I suddenly charged too much on my account that triggered a red flag in their system? Or they think $5000 is too much for me?

2.How will this affect me if I apply for some other Amex card in the future? I plan to apply for the Amex 6% blue cash back card at the end of this month. Will I be given a lower credit limit, asked to provide some income document, or simply rejected because I looked like a suspicious customer?

3. What will happen to my points after they close it?

Thank you.

Re: Being asked by Amex for tax return?

CreditScholar — Mon, 15 Oct 2012 03:23:09 GMT

UtahNewbie wrote:
my background: I'm 21, arrived at U.S. last year (so I don't have a tax return now), credit history for eight months. I'm a college student now, I started a business of buying products on U.S. website and then selling the products to Chinese buyers two months ago.

I've had an Amex zync card for four months, I charged about $800 each month for the first two months. The third month,from when I started my little business, I charged about $1500 and paid if off before the due date. And the fourth month, I charged about $5500 for the first 20 days of this billing period and the balance is $4000 now.

Yesterday, I received a call from Amex financial review department, asking me to provide some files about my income or some tax return form of 2011. I told them that I didn't file the tax return last year because I didn't have any income by then( I know it is technically illegal). And Chinese buyers contacted me and paid me through some Chinese website like Ebay ( Taobao.com, if you have heard of it), I can provide them the transaction list on it, but they said it's not verifiable.

And they said they have to (regretfully) close my account next week.

My question:
1. Is it because I suddenly charged too much on my account that triggered a red flag in their system? Or they think $5000 is too much for me?

2.How will this affect me if I apply for some other Amex card in the future? I plan to apply for the Amex 6% blue cash back card at the end of this month. Will I be given a lower credit limit, asked to provide some income document, or simply rejected because I looked like a suspicious customer?

3. What will happen to my points after they close it?

Thank you.

1. You got triggered for a FR for a couple of reasons: a huge spike in spending in a relatively new account, and putting business expeses through a personal card. The latter alone is enough for them to close you down. Amex will not allow business spending on a personal card, and have very good ways to track this (compared to other lenders).

2. If you apply for another card in the future and are approved, expect to be hit with a FR immediately. You won't be able to even activate or use the card unless you pass the FR. You're essentially locked out of Amex for at least the next couple of years, since you won't be able to produce the 4506-T that they will demand.

3. I'm not sure about your points, maybe someone else has an idea?

Re: Being asked by Amex for tax return?

adavis425 — Mon, 15 Oct 2012 03:31:39 GMT

The points will be forfeited if not used before the account is closed. Points are lost the moment the account is no longer in good standing.

Edited to add: Though the account may not yet be closed, you may be locked out of it. I am not certain that that would preclude you spending your points, but I would think so.

Re: Being asked by Amex for tax return?

Revelate — Mon, 15 Oct 2012 03:32:28 GMT

Welcome to the forums, though I wish they were under different circumstances.

Edit: others stated everything else relevant, got distracted in typing.

Re: Being asked by Amex for tax return?

Uborrow-Upay — Mon, 15 Oct 2012 03:47:35 GMT

Hi, UtahNewbie! Welcome to the forum.

I've gotta ask this...what did you state as your income when app'ing this card? I know you told them (after the fact) that you didn't have any income by then...and I wonder why they issued in the first place.

You must have stated some level of acceptable income, no?

That being said, your question (5 of them, even though they're labled as three) is irrelevant.

Re: Being asked by Amex for tax return?

cashnocredit — Mon, 15 Oct 2012 03:47:48 GMT

UtahNewbie wrote:
my background: I'm 21, arrived at U.S. last year (so I don't have a tax return now), credit history for eight months. I'm a college student now, I started a business of buying products on U.S. website and then selling the products to Chinese buyers two months ago.

I've had an Amex zync card for four months, I charged about $800 each month for the first two months. The third month,from when I started my little business, I charged about $1500 and paid if off before the due date. And the fourth month, I charged about $5500 for the first 20 days of this billing period and the balance is $4000 now.

Yesterday, I received a call from Amex financial review department, asking me to provide some files about my income or some tax return form of 2011. I told them that I didn't file the tax return last year because I didn't have any income by then( I know it is technically illegal). And Chinese buyers contacted me and paid me through some Chinese website like Ebay ( Taobao.com, if you have heard of it), I can provide them the transaction list on it, but they said it's not verifiable.

And they said they have to (regretfully) close my account next week.

My question:
1. Is it because I suddenly charged too much on my account that triggered a red flag in their system? Or they think $5000 is too much for me?

2.How will this affect me if I apply for some other Amex card in the future? I plan to apply for the Amex 6% blue cash back card at the end of this month. Will I be given a lower credit limit, asked to provide some income document, or simply rejected because I looked like a suspicious customer?

3. What will happen to my points after they close it?

Thank you.

Not illegal at all. You are not required to file a tax return unless you make above a certain amount of money.

And yes, running biz purchases (when you own the biz) is frowned on. Especially if it's inventory, less so if it's T&E. If you are an employee they love it when you spend it on T&E as part of your job that you get re-imbursed for.

Re: Being asked by Amex for tax return?

CreditScholar — Mon, 15 Oct 2012 04:01:44 GMT

Uborrow-Upay wrote:
Hi, UtahNewbie! Welcome to the forum.

I've gotta ask this...what did you state as your income when app'ing this card? I know you told them (after the fact) that you didn't have any income by then...and I wonder why they issued in the first place.

You must have stated some level of acceptable income, no?

That being said, your question (5 of them, even though they're labled as three) is irrelevant.

The tax-free threshold is pretty damned low, and if anyone put an amount under that on their Amex application I doubt they'd be accepted.

Re: Being asked by Amex for tax return?

UtahNewbie — Mon, 15 Oct 2012 04:16:44 GMT

"I've gotta ask this...what did you state as your income when app'ing this card? I know you told them (after the fact) that you didn't have any income by then...and I wonder why they issued in the first place. "

Actually I lied, I said I worked in a college and I had an annual income of 50K when I applied for the card. Yeah, I know it is perjury which can be used to prosecute me.

Re: Being asked by Amex for tax return?

CreditScholar — Mon, 15 Oct 2012 04:19:18 GMT

UtahNewbie wrote:
"I've gotta ask this...what did you state as your income when app'ing this card? I know you told them (after the fact) that you didn't have any income by then...and I wonder why they issued in the first place. "

Actually I lied, I said I worked in a college and I had an annual income of 50K when I applied for the card. Yeah, I know it is perjury which can be used to prosecute me.

At this point I wouldn't count on Amex giving you a card again in the future. I might be wrong, but this definitely isn't a good look.

Re: Being asked by Amex for tax return?

webhopper — Mon, 15 Oct 2012 04:19:41 GMT

UtahNewbie wrote:
"I've gotta ask this...what did you state as your income when app'ing this card? I know you told them (after the fact) that you didn't have any income by then...and I wonder why they issued in the first place. "

Actually I lied, I said I worked in a college and I had an annual income of 50K when I applied for the card. Yeah, I know it is perjury which can be used to prosecute me.

Let them close the card. Don't apply for a new one. Don't ever lie on an app again. You could go to jail for this. Pay the 4k immediately and hope that you avoid prosecution.

Re: Being asked by Amex for tax return?

jd5189 — Mon, 15 Oct 2012 04:22:52 GMT

Open a business credit card next time

Re: Being asked by Amex for tax return?

webhopper — Mon, 15 Oct 2012 04:24:36 GMT

jd5189 wrote:
Open a business credit card next time

Un wise. We don't even know what he is selling to the Chinese at a profit.

Re: Being asked by Amex for tax return?

jd5189 — Mon, 15 Oct 2012 04:25:25 GMT

webhopper wrote:
jd5189 wrote:
Open a business credit card next time
Un wise. We don't even know what he is selling to the Chinese at a profit.

lol.... true.

Re: Being asked by Amex for tax return?

UtahNewbie — Mon, 15 Oct 2012 04:29:41 GMT

What I resell were clothes bought on Abercrombie&Fitch.com, Nike.com or cosmetic things bought on websites like kiehls.com, Ebay.com, Newegg.com, Amazon.com . It's simply some of these websites only accept American credit card. And I bought a lot of them when there's a promotion and then resell them.

Re: Being asked by Amex for tax return?

webhopper — Mon, 15 Oct 2012 04:32:36 GMT

UtahNewbie wrote:
What I resell were clothes bought on Abercrombie&Fitch.com, Nike.com or cosmetic things bought on websites like kiehls.com, Ebay.com, Newegg.com, Amazon.com . It's simply some of these websites only accept American credit card. And I bought a lot of them when there's a promotion and then resell them.

Smart kid. Definately smart; except when it came to lying on the application. You need startup capital to purchase inventory... not a credit card. Do you have family members who can sponsor your startup?

Re: Being asked by Amex for tax return?

CreditScholar — Mon, 15 Oct 2012 04:34:49 GMT

webhopper wrote:
UtahNewbie wrote:
What I resell were clothes bought on Abercrombie&Fitch.com, Nike.com or cosmetic things bought on websites like kiehls.com, Ebay.com, Newegg.com, Amazon.com . It's simply some of these websites only accept American credit card. And I bought a lot of them when there's a promotion and then resell them.
Smart kid. Definately smart; except when it came to lying on the application. You need startup capital to purchase inventory... not a credit card. Do you have family members who can sponsor your startup?

+1. I agree with webhopper on this. Your plan has potential, this much I can see. You need to carefully think about how to proceed from here. Eventually you'll need a business card or line of credit, but for now the question is how to get off the ground. With no credit history in the US, you'll need to look elsewhere for the startup funds.

Re: Being asked by Amex for tax return?

UtahNewbie — Mon, 15 Oct 2012 05:39:36 GMT

Yes, my parents sponsor me and it's pretty much enough. To be honest, I find a lot of opportunities here in U.S. while a lot U.S. peers are whining about contracting job markets. And thank you sincerely for your encouragement.

What I'm pretty sad here isn't that I lose some available credit limit. It is that I can't have an Amex Blue Cash Prefered card. Though there are other options, none are as good.

Re: Being asked by Amex for tax return?

minimock — Mon, 15 Oct 2012 04:54:43 GMT

Im not real sure you would have good luck with synthetic marijuana showing up on your billing statment, business or personal :)

Might be a green flag there :D

Re: Being asked by Amex for tax return?

trumpet-205 — Mon, 15 Oct 2012 05:10:09 GMT

That is some pretty daring move you pulled off. As stated, you should NEVER charge business charge on AMEX personal card. With business charge and sudden spike on spending no wonder AMEX came after you. Since you cannot produce 4506-T you will be locked out of AMEX. Any future AMEX application will get flagged, and you will be asked to produce 4506-T on the spot.

If your parents are sponsoring your small business then for now get a prepaid card from AMEX and use that instead. Don't put your business charge on other credit cards you may have.

Friendly advice: Utah outlawed synthetic marijuana (plus all synthetic controlled substance). Unless you want to pay a visit to state prison, forget about it.

Re: Being asked by Amex for tax return?

Uborrow-Upay — Mon, 15 Oct 2012 05:10:16 GMT

UtahNewbie wrote:
Yes, my parents sponsor me and it's pretty much enough. To be honest, I find a lot of opportunities here in U.S. while a lot U.S. peers are whining about contracting job markets. And thank you sincerely for your encouragement.

What I'm pretty sad here isn't that I lose some available credit limit. It is that I can't have an Amex Blue Cash Prefered card which can be used to buy a $500 Visa gift card or Amazon gift card with a 6% cashback at local grocery store, if you know what I mean. And the 3% cashback on department store is also gone. Though there are other options, none are as good.

By the way, I've even come up with a lot of bizarre ideas. As an example, I have considered reselling synthetic marijuana(I heard about this on NPR news), which is technically legal (as of August,2012 ) in both U.S. and China after checking onerous laws. The fact that Chinese government does not really obey the law makes me to ditch that idea (in addition to the moral issue).

(My Mom told me once that if I couldn't say anything nice about someone, I shouldn't say anything at all...so, seems like you have a nice room in the dorm, eh?)