New York, N.Y. (February 22, 2024) – On February 21, 2024, the IRS announced its plans to begin dozens of audits on business aircraft involving personal use. The agency indicated that these audits will focus on aircraft usage "by large corporations, large partnerships and high-income taxpayers and whether for tax purposes the use of jets is being properly allocated between business and personal reasons."
In the announcement, the IRS said: "Business aircraft are
often used for both business and personal reasons by officers,
executives, other employees, shareholders and partners. In general,
the tax code passed by Congress allows a business deduction for
expenses of maintaining an asset, such as a corporate jet, if that
asset is utilized for a business purpose. However, the use of a
company aircraft must be allocated between business use and
personal use. This is a complex area of tax law, and record-keeping
can be challenging."
Lewis Brisbois attorneys are leaders in the business aviation
industry, with deep knowledge of the relevant statutes,
regulations, and other guidance, that present and publish with
national industry platforms.
Please contact David Shannon, Chair of Lewis Brisbois'
Business Aviation Practice, to evaluate your
organizational and operational structure as well as highlight best
practices with respect to passenger classifications for income and
deduction purposes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
