It may be a rebate, but that doesn't end the taxation question at that point. If you are purchasing a good, say a computer for instance, for $1,000 and get 5% cc rebate, your basis in that computer is $950 (1,000 x (100% - 5%)). It you turned around and sold it for anything more than $950 you would have a taxable gain. If you use it up until its breaks/is worthless/etc. there is nothing to worry about (unless you can still trick some poor sap into giving you more than the $950 for it at this point).
However, if you are MS'ign GCs or other cash equivalents the IRS could view it as not being any different. You are spending $1,000 on a GC and getting $1,050 in return (ignoring GC fees). Thus, you are $50 richer. Code Sec. 61 defines gross income as "all income from whatever source derived." It is a purposely broad definition because the government doesn't want to miss out on your tax dollars. Does anyone have an argument why having $1,050 moments after having $1,000 isn't income?
It is possible you could argue that the GC is a good and not cash/cash equivalent and thus your basis in the GC s/b $950. However, unless you then use the GC to purchase another good (say the $1,000 from the earlier example) to transfer your basis, converting that GC into cash (like transfering to Serve and then paying your CC bill) would likely be viewed the same as the sale of computer, generating the $50 gain.
Remember, the IRS isn't/wasn't familiar with MS (or considered it too small a population to address it) so it was assuming normal credit card purchases for good or services it the PLR.
Also, echoing one of the other posts in this thread, not only is it highly unlikely that you will get audited, it is even more unlikely the IRS would look at your CC transactions and ask about any rewards you've received. Thus, detection risk is low.
This post does not constitute tax advice. Please consult with your accountant regarding the tax implications of MS activities.