BusinessPostCorner.com
No Result
View All Result
Friday, July 18, 2025
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
BusinessPostCorner.com
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
No Result
View All Result
BusinessPostCorner.com
No Result
View All Result

Under the radar no more: IRS increases scrutiny on corporate jets

March 28, 2024
in Accounting
Reading Time: 4 mins read
A A
0
Under the radar no more: IRS increases scrutiny on corporate jets
ShareShareShareShareShare

The Internal Revenue Service recently announced a campaign to investigate the use of corporate jets by large businesses and wealthy individuals. Although the announcement was made on Feb. 21, 2024, the campaign is part of a larger effort by the IRS to increase its scrutiny of high-income taxpayers and large businesses to help close the tax gap. 

“It’s part of the larger IRS campaign,” said Zeinat Zughayer, tax controversy manager at Top 100 Firm Baker Tilly. 

The IRS has already collected $482 million after completing audits of 1,600 wealthy individuals as part of its continuing efforts aim to ensure that “high-income groups aren’t flying under the radar” with their tax responsibilities.

The agency’s examinations of corporate aircraft typically surround three issues, according to Zughayer: 

  • Whether the taxpayer qualified for bonus depreciation;
  • Whether the taxpayer has substantiated the business deduction; and, 
  • Whether the taxpayer has properly imputed income and/or properly calculated the depreciation disallowance for personal use.

“The use of corporate aircrafts by large businesses and high-net-worth individuals has always been an audit risk that we identify when advising clients,” Zughayer said. “We’ve learned that the IRS tends to focus on the classification of the flight, whether it’s business or personal, and then how they’re accounting for the deduction of business expenses or disallowing a portion of those expenses to account for personal usage. We need to substantiate the use of the aircraft to ensure that the business reason is properly documented, and then make sure that we’re properly imputing income or calculating the disallowance for personal usage.”
Zughayer indicated that while there is increased scrutiny of deductions, the rules themselves haven’t changed. “The fact that it’s getting more attention is part of the larger effort regarding high-net-worth individuals and large-business exams,” she said. “And the IRS has seen an increase in these deductions post-COVID, with more and more people deciding to purchase a corporate aircraft for their business rather than flying on commercial aircraft.” 

Zughayer advises clients who purchase corporate jets to put best practices in place right from the beginning. 

Patrick T. Fallon/AFP via Getty Images

“A lot of our clients now purchase flight log software to help document the business purpose of the flight, who’s on the flight, the destination and when they’re leaving, and then also taking it a step further from past exam experience,” she said. “We’ve learned that the flight log itself isn’t enough on its own. You usually need to provide further documentation, for example, an email confirming the meeting. I’ve had IRS agents ask me to provide a copy of the pamphlet from a conference that the client was attending. Make sure that three years from now, if they’re under audit, that you have the backup documentation already prepared.”

Another reason the issue has become a hot topic, according to Zughayer, is that a number of progressive senators wrote to Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel praising the fact that the IRS is “increasing audits of corporate jet usage and cracking down on any executives who are illegally excluding income related to personal trips.”

The letter, dated March 10, 2024, is signed by Senators Elizabeth Warren, Ron Wyden, Bernie Sanders, Sheldon Whitehouse, Chris Van Hollen and Edward Markey, all Democrats. 

“Again, we appreciate the IRS’s commitment to using new funding to make our Tax Code fairer, including the recent announcement of audits of wealthy taxpayers who claim millions in deductions for their use of corporate jets,” the senators wrote. “As the agency moves forward with these audits, we urge you also to pursue rulemaking to properly close the [standard industry fare level] loophole that allows ultra-wealthy taxpayers to avoid tax on personal trips.”

Credit: Source link

ShareTweetSendPinShare
Previous Post

4 ways the federal government can help with debt

Next Post

SEC cybersecurity rules mean new steps for CFOs

Next Post
SEC cybersecurity rules mean new steps for CFOs

SEC cybersecurity rules mean new steps for CFOs

Digital Asset Bills Create A Casino For Crypto Billionaires, Rep. Maxine Waters Says 

Digital Asset Bills Create A Casino For Crypto Billionaires, Rep. Maxine Waters Says 

July 16, 2025
Al Fayed-owned Mayfair penthouse has ‘leaky roofs and noisy lifts’, BBC reveals

Al Fayed-owned Mayfair penthouse has ‘leaky roofs and noisy lifts’, BBC reveals

July 12, 2025
US demands to know what allies would do in event of war over Taiwan

US demands to know what allies would do in event of war over Taiwan

July 12, 2025
US passes Genius Act, first major national crypto legislation

US passes Genius Act, first major national crypto legislation

July 17, 2025
Solana Price Prediction: Experts See SOL Hitting 0 Before August Amid Bullish Chart Patterns

Solana Price Prediction: Experts See SOL Hitting $300 Before August Amid Bullish Chart Patterns

July 13, 2025
Deloitte gives its auditors more agentic AI capacities

Deloitte gives its auditors more agentic AI capacities

July 15, 2025
BusinessPostCorner.com

BusinessPostCorner.com is an online news portal that aims to share the latest news about following topics: Accounting, Tax, Business, Finance, Crypto, Management, Human resources and Marketing. Feel free to get in touch with us!

Recent News

Huddersfield woman urges more support for people struggling with debt

Huddersfield woman urges more support for people struggling with debt

July 18, 2025
I went from side-hustling to running a  million-a-year marketing agency that works with MrBeast: Here’s my most important investment 

I went from side-hustling to running a $27 million-a-year marketing agency that works with MrBeast: Here’s my most important investment 

July 18, 2025

Our Newsletter!

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2023 businesspostcorner.com - All Rights Reserved!

No Result
View All Result
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources

© 2023 businesspostcorner.com - All Rights Reserved!