1 IRS Tax Return + 3 Months + $57 + 5 Form Letters + 4 Telphone Calls + 3 Bank Letters = Approved For American Express SPG Card

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1 IRS Tax Return + 3 Months + $57 + 5 Form Letters + 4 Telphone Calls + 3 Bank Letters = Approved For American Express SPG Card

Million Mile Secrets1 IRS Tax Return + 3 Months + $57 + 5 Form Letters + 4 Telphone Calls + 3 Bank Letters = Approved For American Express SPG CardMillion Mile Secrets Team

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Don’t mess with American Express.

Back in Spring 2009, I ordered coins on an American Express SPG business card.  In retrospect, this wasn’t the smartest thing to do.  The default rates on small business accounts is very high, and American Express in particular, runs financial reviews on accounts if they suspect that the borrower is likely to default.

One day, both my American Express personal and business SPG cards stopped working!  I called the customer service help desk and was connected to the Financial Review department (Check out this FlyerTalk post for a Monty-Pythonesque explanation of the AMEX Financial Review process).

The curt representative wanted to know more about the purchases from the US Mint.  I said that I was a coin collector (true) and that I was fascinated by the $1 coins issued by the mint (also true). 😉

Long story short, she explained that all my cards would be suspended until American Express reviewed my tax returns.  And if I didn’t submit the tax returns within 30 days, ALL my American Express cards would be cancelled.  She wanted me to complete Form 4506 and submit it to the IRS who would then send American Express a copy of my tax returns.

American Express didn’t want a tax transcript (Form 4506-T) which lists a line-by-line breakdown of the tax return, but wanted me to pay $57 for the 4506 to get my entire tax return (including all forms, schedules, and W-2s)!

I was young and foolish, and had enough SPG points at the time for my 6 week trip to Europe, so I told her to cancel my accounts (It is much better to have your credit report show that accounts were cancelled at your request, than by the creditor).

Fast Forward to July 2011, when the SPG card is back with a sign-up bonus of 30,000 points after spending $4,500 within 3 months.  I applied for the card via a referral from a MilePoint member as part of my July App-O-Rama which netted me 340,000 miles and points.

I got approved for all the cards except for the American Express SPG card.  2 weeks after my application, I received a letter from American Express asking me to submit Form 4506 to the IRS and a letter from my bank verifying my current mailing address.

Fair enough, and since my SPG balance was dwindling, submitting my tax returns didn’t seem too bad.  I replied back and enclosed a letter from Chase verifying my home address and a copy of the IRS form which I had submitted.  A few weeks later, I got another letter (#2) saying that the letter from Chase couldn’t be accepted because American Express couldn’t contact the person who signed the letter.

Of course they couldn’t contact the person who signed the letter, because it was a form letter which Chase regularly produces for clients!  I wrote AMEX back with a letter from Bank Direct verifying my address and I also let them know that the IRS was processing the tax return.

I got back another form letter (#3) from American Express which was identical to the one I had received previously.  So I called the application status number and finally spoke to an agent who told me that the letter couldn’t be accepted because he couldn’t contact the person at BankDirect who signed the letter.

At this point, I lost my patience and asked for a supervisor.  Somehow the line got disconnected, so I called back and again asked for a supervisor.  I told the supervisor that he had letters from2 banks and that both verified my mailing address.  The supervisor agreed to look into it, but couldn’t process the application since the IRS hadn’t yet sent in my tax return (though they had cashed my check!).

Yup, I then got form letter (#4) which was identical to the previous one.  I called AMEX again (#3) and this time got a terrific rep who acknowledged receiving a photocopy of my tax return from the IRS and acknowledged that AMEX had received 2 copies from my bank verifying my address.  He said that I would hear from AMEX soon.

I did hear from AMEX soon (letter #5), and yes, they still wanted a copy of my tax return and letter confirming my address.  *Sigh*  I was reminded of Randy Pausch’s speech where he says that roadblocks are just ways to see how badly you really want something.  I badly wanted the 30,000 SPG points, so I sent them another letter from my local bank verifying my address.

I later called American Express, exchanged pleasantries with the rep, but asked for a supervisor after the regular rep told me that AMEX had received neither my tax returns nor any letter from my banks!

The supervisor was apologetic and snorted in surprise when I mentioned that it was 3 months since my application and I still hadn’t got a decision.  He initially claimed that AMEX hadn’t received my tax return yet and that was holding up the process.  I told him that the IRS had cashed my check and that another rep had acknowledged receiving my tax return.  I stressed that the conversion was recorded and that he could listen to the tapes while I was on hold. 🙂

After a long time on hold, the supervisor was very apologetic and asked me to stay on hold while he processed the application.  He was soon back and said the magic words “You’re approved.”

So 3 months later I was approved for the card!

Bottom Line: 

American Express has very low tolerance to activities suggestive of financial distress in borrowers and is quick to initiate Financial Reviews.  I’ve read reports of American Express initiating Financial Reviews for adding too many authorized users to cards and for buying too many American Express gift directly from American Express.

I’m glad to be back in American Express’ good books and will do my best to not fall from their good graces!

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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No way, Jose. DO NOT GIVE IN YOUR TAX RETURN. It is your private domain. No reason to have it sit with AMEX for people to look at. The only way you even show it is to get a a large loan from a reputable bank for things like a mortage on a house, business loan, etc. NOT worth your privacy invasion and wasted time fiddling with this just to save some points. The only thing they should worry about is your credit score.

Hello! Great article. Thank you for sharing your experience with us. I think being persistent and having lots of patience really works well. BTW, if anyone needs to fill out a “IRS 4506 Form”,I found a blank form here: http://goo.gl/dh6U7n

At the outset, please my apologies for this rather lengthy post. I really am in a fix, and wanted to provide as complete a picture as possible.

Around the 1st week of June, was trying to meet a 10K spend on the Amex Plat Buss for 100K MR points, and so was purchasing GCs at the local store (was trying to put though the about 4K in two 2K transactions, which I then would load to BB). My second 2K did not go though due to a security alert, and so had to call in. My surprise to find that I was transferred to the dreaded AMEX financial review team, who basically said I needed to provide a 4506T authorizing Amex to evaluate my accounts. I have a healthy household income, have always paid balances in full, and have a FICO of around 810. So was cautiously optimistic that it will go through.

I sent it in and was told that it would take 5-7 buss days for the process to be completed (and was advised that there might be either a limit to my accounts or no change, which was a relief). I had to leave for Europe for a planned vacation with my wife the next day (10th), and so was hoping that this would get resolved shortly. But nothing happened for about a week.

I called in again to check the status (this was the 17th), and my case manger told me that when he contacted the IRS, they reported that I had NOT FILED a tax return for 2013! So there was no way for them to check my credit worthiness, and so the accounts might need to be closed. This was highly alarming, since I always get my taxes done well within time (this year was in March), and I have the physical copy of the return (this is of course the first time something like this has happened to me with my taxes and I am looking into that matter).

I suggested that this was probably a mistake, and asked him for an extension, given that I was still in Europe (I had informed him before I left) and returning only after 4 days. His response was that the most he can allow me was until the 25th (in his words – “to be fair to all the other Amex customers”), and the only way forward was to request a transcript by mail through the IRS send it directly to AMEX.

Seeing no other way around with me being in Paris at that time and no access to any other documentation, I quickly e-filed my taxes again that same night online, hoping that the 10 days I had might be sufficient for the IRS to maybe get my application in the system, and thus be able to offer AMEX a transcript. Unfortunately, although the IRS received and was the processing my return, it would take them 21days to do so, and so there is no way for me to get AMEX a transcript from the IRS.

So now my situation is this – I have a tax return which is under processing, and might take anywhere up to another 2 weeks to get done. I only have one week with AMEX, wherein I need to have the transcript sent to me first and then mailed out to them (highly unlikely that this gets done). Best case scenario – I convince my case manager to give me an extension, but going by my conversations with my case manager thus far does not seem too promising. Scenario2: I preemptively close my accounts myself, and thus prevent my credit report saying that it was closed by the issuer. Scenario3: Just let it play out.

I have about 40K MR points that I need to use up. I would like to transfer them to my Hawaiian Account (they have a bonus offer right now), but am not sure if this will work since there is a minimal fee/tax for the transfer that is charged to the Amex card, and since charging has been suspended, this will probably not go through. My other option is to buy something from the Amex online portal, but the redemption values are not really good. I have no balance on any of the cards, so using it for paying down my balance is not an option either.

I am looking for advise on these possibilities:

1. How do I go about convincing my case manager to give me an extension? My thoughts were to offer to send him my W2, my salary slips, my tax returns for the past 2 years (which I have), and also the tax documentation that I had completed in March but that did not really get filed. He seems a tough cookie, and as much as I would like to suggest to speak to a manager, I am afraid I might piss him off.

2. Transfer my MR points out (either through the mall). I guess my delta points and SPG points would be safe. Then close out my accounts myself before they do it (if this is possible). In this case, what happens to the annual fees that I pay (I just signed up for the Amex Plat Business in April, so have only used up about a months worth of value). Do they refund it on a prorated basis?

3. Do nothing and wait for them to complete the process. I am guess they will offer me a chance to do something with my MR points (I have seen earlier data points where people were allowed 3-6 months to use them up). Not sure if this is really the best option since I am completely at their mercy at that point.

Please feel free to suggest other alternatives. I wanted to get some feedback and put together a strong action plan before I call in again to talk to the case manager. Any comments are welcome. I intend to call in again to speak to my manager on Monday.

Again, my apologies for this long post, but really wanted to get my thoughts on paper.

Have a look at the DoJ Case against Amex under 15USC1 because a blog would be interesting.

what should I do if I get a FR

1. Fill 4506-T and wait or close all the accounts by myself?

2. If I close all the account, do I have time to transfer all the points to frequent flyers program?

Million Mile Secrets

@ccy – Only you can decide what to do. You can transfer your membership rewawrds points before you close your accounts.

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