The National Business Aviation Association (NBAA) has had substantial engagement with the Internal Revenue Service (IRS) and the U.S. Department of the Treasury over the last several years in regard to tax regulations for business meals and entertainment activities.
The Tax Cuts and Jobs Act in 2018 introduced significant changes to the Internal Revenue Code, including to Section 274, with the elimination of deductions for business entertainment expenses. Through the NBAA's efforts with the IRS, the final regulations include important clarifications on how meals and entertainment deductions may impact the deductibility of flights on business aircraft.
The NBAA is providing an article written by Tax Committee Chair John Hoover regarding the impact on business aviation of the IRS regulations. The article discusses the following topics which are affected by the final regulation:
- expenses for personal meals as a nonentertainment activity
- travel costs for trips involving entertainment and nonentertainment activities
- deductions for spouses traveling for nonbusiness purposes
- the 50 percent deduction disallowance for meals
- a relaxation of punitive actions for improper reporting
- the adequate and full consideration exception
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.