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VOL. 48 | NO. 7 | Friday, February 16, 2024

IRS to pursue business private jet usage in new round of audits on high-wealth taxpayers

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WASHINGTON (AP) — First, there were trackers on Taylor Swift and other celebrities' private jet usage. Now, there will be more scrutiny on executives' personal use of business aircraft who write it off as a tax expense.

IRS leadership said Wednesday that the agency will start conducting dozens of audits on businesses' private jets and how they are used personally by executives and written off as a tax deduction — as part of the agency's ongoing mission of going after high-wealth tax cheats who game the tax system at the expense of American taxpayers.

The audits will focus on aircraft used by large corporations and high-income taxpayers and whether the tax purpose of the jet use is being properly allocated, the IRS says.

"At this time of year, when millions of hardworking taxpayers are working on their taxes, we want them to feel confident that everyone is playing by the same rules," IRS Commissioner Daniel Werfel said on a call with reporters to preview the announcement. Tax season began Jan. 29.

"These aircraft audits will help ensure high-income groups aren't flying under the radar with their tax responsibilities," he said.

There are more than 10,000 corporate jets in the US., according to the IRS, valued at tens of millions of dollars and many can be fully deducted.

The Tax Cuts and Jobs Act, passed during the Trump administration, allowed for 100% bonus depreciation and expensing of private jets — which allowed taxpayers to write off the cost of aircraft purchased and put into service between September 2017 and January 2023.

Werfel said the federal tax collector will use resources from Democrats' Inflation Reduction Act to more closely examine private jet usage — which has not been closely scrutinized during the past decade as funding fell sharply in the last decade.

"Our audit rates have been anemic," he said on the call. An April 2023 IRS report on tax audit data states that "continued resource constraints have limited the agency's ability to address high-end noncompliance" stating that in tax year 2018, audit rates for people making more than $10 million were 9.2%, down from 13.6% in 2012. And in the same time period, overall corporate audit rates fell from 1.3% to .6%.

Werfel said audits related to aircraft usage could increase in the future depending on the results of the initial audits and as the IRS continues hiring more examiners.

"To be clear, that doesn't mean everyone in a high-income category partnership or corporation is evading or avoiding their tax responsibility," Werfel said. "But it does mean that there's more work to do for the IRS to make sure people are paying what they owe."

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PROPERTY SALES 0 0 0
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FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0