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Abstract: 

In Rev. Rul. 2007-1, a credit card issuer is entitled to a fee if it refuses to honor a credit card convenience check that, if honored, would leave the cardholder over his limit. The question posed is whether this fee is interest income for federal income tax purposes. The Ruling concludes that it is not, and that the fee is includible in income when the nonsufficient funds (NSF) event occurs. The case can be distinguished from technical advice where a nonsufficient funds fee was treated as interest.

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