IRS countersues net jets

[jonjuan]

http://www.ainonline.com/aviation-n...countersues-netjets-seeking-367m-excise-taxes

The IRS has countersued NetJets for more than $360 million in alleged uncollected excise taxes. In November, NetJets sued the federal government for what it said were wrongfully imposed taxes, interest and penalties totaling more than $642.7 million. NetJets claimed that as a manager of private aircraft, it was not required to pay a “ticket tax” because its services were not taxable transportation.

Less than six months later, the IRS filed the countersuit, refuting NetJets’ claim and asserting that four NetJets business units “failed, neglected or refused” to pay excise taxes and related penalties between 2003 and 2009 in the amount of approximately $367 million. The countersuit claims NetJets Aviation owes $302.1 million, NetJets International owes $53 million, Executive Jet Management owes $10 million and NetJets Large Aircraft owes $1.91 million. In 2011, NetJets posted a pre-tax profit of $227 million.

 

[CALRepublic]

new article on ainonline.com " IRS memo triggers federal exicse tax fears".. if the IRS manages to extract money out of NJA, they're gonna go after the other management companies. So it looks like this is NOT just a Netjets problem.


Management Company Fears

What [the IRS has] attempted to do is take a simplistic issue and create a ruling without understanding all the potential variations that actually take place in the industry, said Andrew Richmond, CEO of charter/management firm TWC Aviation. I think theyre saying, We are already receiving FET on Part 135 charters, how is a Part 91 flight different? Theyre trying to interpret the service that a management company is providing and fit it into the existing tax code that entitles them to collect taxes.

What mostly concerns Richmond is not the prospect of the IRS applying the FET to management fees but deciding that FET should be paid for an average hourly flight-time charge. Management fees typically might be up to $10,000 per month for a large jet. FET on that would be $750 a month. But FET for a Gulfstream flying 40 hours a month at an hourly rate of $4,000 would generate $12,000 per month in tax revenue. Thats where theres still a lot of discussion that needs to be had, he said, because since we dont charge an hour of flight time, how would they determine what tax is due? Are they going to look at the charter rates and say it should be comparable? What if no invoice is being generated? Will they argue that its an imputed tax and that the invoicing and collection of the fee is not a requirement for the tax?

Richmond also worries about how far back the IRS will reach during audits of management companies. If the IRS wins [the NetJets claim] and prevails on collecting back taxes going all the way back to, say, 10 years, does that open the door to go to all management companies and demand 10 years of back taxes as well?

It goes without saying that this could be devastating for the aircraft management business, a top executive at a large charter/management firm told AIN. It also could have potential industry safety impacts as aircraft owners are forced to go in-house (and ostensibly to less controlled environments).

 

[cldsfr79]

The IRS needs to find a different tree to bark up. I'm sure the Obama administration, which saddled this country with historic and epic debt, is looking for anyone to pay the bill. First they tried to tax it out of wealthy income, now they are going after wealth items.

First the "ticket tax" is a complete joke. Really IRS? Ticket Tax? and to whom do we sell tickets? Didn't know i had a United customer on board their privately owned jet. And now they are going after another "excise tax". How about everyone register their aircraft in Monte Carlo or the Isle of Man or some where else off shore and give the feds the big middle finger.

Next the IRS will be suing anyone that owns a car. They will tell you that since people who ride the bus pay a $1 for a ride, you too, with your private car, must pay a excise transportation fare every time you drive some where.

I was really hoping for the next president to sack the IRS and simplify the tax code, but I don't see that happening.

 

[gunfyter]

The IRS better hope they have better lawyers than the Justice Department ... LOL

 

[AftCG182]

The IRS needs to find a different tree to bark up. I'm sure the Obama administration, which saddled this country with historic and epic debt, is looking for anyone to pay the bill.

Obama has the monumental task of cleaning up Bush's mess. Bush spent 8 years absolutely wrecking this country; Obama (or anyone else for that matter) isn't going to fix it overnight. Or in one term, if you prefer.

If Congress starts cooperating, we'll see huge improvments in Obama's 2nd term. We're already seeing a big improvement in many areas...

 

[gunfyter]

We need to find his birth certificate first... and his draft card. Failure to register for the draft disqualifies a person from federal office.

But after that we should be good to go and a tremendous 4 more years....

 

[CRAWDADDY]

We need to find his birth certificate first... and his draft card.

Would you accept a PDF?

 

[gunfyter]

Would you accept a PDF?

Only if the IRS accepts a PDF of the $367 Million. Then sure I would.

 

[jonjuan]

Only if the IRS accepts a PDF of the $367 Million. Then sure I would.

LOL.......Then they'll send back a PDF of handcuffs.

 

[OPECJet]

Obama has the monumental task of cleaning up Bush's mess. Bush spent 8 years absolutely wrecking this country; Obama (or anyone else for that matter) isn't going to fix it.

If Congress starts cooperating, we'll see huge improvements in Romney's 1st term. We're already seeing a big improvement in many areas unless you really pay attention.

Fixed it for you......

 

[gunfyter]

LOL.......Then they'll send back a PDF of handcuffs.

its OK. I can unlock them with ADOBE Illustrator....

 

[sshrae]

I'm sure Obama's approval rating is reflecting how good a job he is doing at cleaning up Bush's mess. Also, congress during Obama's first year or so in office was democrat majority, so the congress thing doesn't really go very far.

 

[wacoflyr]

Yes, and since the republicans got a majority in the house, their approval rating has just skyrocketed! Oh, wait just a mo,....

 

[sshrae]

Not that I'm complaining, I sold the majority of my equities before the crash thinking Hillary was going to be in office. Bought them back at less than half the price a little while later. Dumb luck, but I am the biggest fan of the democratic party right now. I do have faith in Bernanke, who has much more to do with the economy than Obama. cheers.

 

[AnimalMother]

Obama has the monumental task of cleaning up Bush's mess. Bush spent 8 years absolutely wrecking this country; Obama (or anyone else for that matter) isn't going to fix it overnight. Or in one term, if you prefer.

If Congress starts cooperating, we'll see huge improvments in Obama's 2nd term. We're already seeing a big improvement in many areas...

They let people like you fly airplanes?

 

[AftCG182]

They let people like you fly airplanes?

Wow. SUPER original insult, there. How long did it take ya to come up with that one?

 

[AnimalMother]

Wow. SUPER original insult, there. How long did it take ya to come up with that one?

Pretty much instantly after reading that retarded post of yours.
:laugh:

 

[AftCG182]

Pretty much instantly after reading that retarded post of yours.
:laugh:

I misunderestimated your prowess as a decider. You win!
Hahahaha!!!

 

[flyinja]

 

[glasspilot]

They let people like you fly airplanes?

Yes, they do. Turns out folks with a brain are allowed to fly airplanes. Nice avatar...Donkey Punch, that's great. Do they let you fly too? Crazy small world! I guess left AND right get to have jobs in this country. Weird.

 

[Indy319FA]

Wait a minute....I thought Warren Buffet was complaining he doesn't pay enough taxes.....now he's saying the IRS overtaxed him? Does his buddy Obama know about this? I mean, after all, Obama is calling his new tax the "Buffet Rule". Maybe Obama needs to call his buddy Warren and tell him he needs to have Netjets pay up since Buffet doesn't pay enough in taxes...

Normally I'd be rooting against the IRS....but I'll make an exception in this case since Buffet feels we all need to pay more taxes.....

 

[BentOver]

You all do realize that the IRS is going after a company owned by Berkshire Hathaway.. Not going after Warren Buffett.. Warren Buffett does not personally own Netjets. He is the man in charge of Berkshire Hathaway, which owns Netjets....

Buffett says he should pay more personal tax. He said nothing about one if his companies needing to pay more taxes. What would you expect any comapny to do. Just give the money to the IRS because they say so?

 

[glasspilot]

Wait a minute....I thought Warren Buffet was complaining he doesn't pay enough taxes.....now he's saying the IRS overtaxed him? Does his buddy Obama know about this? I mean, after all, Obama is calling his new tax the "Buffet Rule". Maybe Obama needs to call his buddy Warren and tell him he needs to have Netjets pay up since Buffet doesn't pay enough in taxes...

Normally I'd be rooting against the IRS....but I'll make an exception in this case since Buffet feels we all need to pay more taxes.....

Obviously you get it. Corporations are people my friend. NetJets is Warren Buffent. They are the exact same thing. When NJ pays taxes they are applied to WBs tax return...same thing. No distinction. If Warren Buffet committed first degree murder then every single employee of NetJets would go to prison for life...unless they lived in a capitol punishment state.

See how it works? Corporations are people. They have rights.