Thursday, 22 February, 2024
NATA Member Alert: IRS Announces Audits of Business Aircraft Usage
On February 21, 2024, the Internal Revenue Service (IRS) announced plans to conduct focused audits involving personal use of corporate aircraft. These audits will center on ensuring business aircraft usage is compliant with the tax code requirements to separately allocate use for business and personal reasons. NATA members providing services to corporate aircraft owners should be aware of this audit program and provide supporting documentation as needed to owners and/or their tax preparers.
Under the tax code, an aircraft utilized for business purposes may be classified as a business deduction for the expenses of maintaining the aircraft as an asset. However, if the corporate aircraft is utilized for both business and personal uses, each use must be accurately allocated. It is important to note that the amount of personal use of the aircraft could impact the aircraft’s eligibility to be used as a business expense.
The new auditing effort is a part of an IRS plan to ensure tax compliance by large corporations, large partnerships, and high-income individuals who utilize business aircraft.
Under the Inflation Reduction Act, the IRS received additional funding that will in part be put towards these audits by using advanced analytics and resources to look more closely into the tax compliance for corporate jet usage. The IRS states that the number of these audits may rise and that more announcements will likely be made as the scrutiny on high-income individuals and large partnerships/corporations continues to increase. NATA will keep you apprised of any updates or further IRS actions.
For general press inquiries, contact Shannon Chambers at 703-298-1347 or schambers@nata.aero.
The National Air Transportation Association (NATA) has been the voice of aviation business for more than 80 years. Representing nearly 3,700 aviation businesses, NATA’s member companies provide a broad range of services to general aviation, the airlines and the military and NATA serves as the public policy group representing the interests of aviation businesses before Congress and the federal agencies.