part 91 Flight dept getting audited by the IRS

[H.Agenda]

Mine is, and now I've heard of 2 others. Anyone else?

 

[gret]

The IRS is going after business aviation with a lot of gusto. See Netjets owing close to $1 billion in FET.

Most likely they are going after executive compensation for personal use of the a/c. Who was on the plane (family members, girlfriends, etc.), where did you go (Aspen or Akron), what was the purpose of the trip etc. Some you will be able to answer, some you won't, some you don't want to.

 

[fishfry]

If the IRS gets serious on enforcing tax codes re private aviation that could be hugely painful for this industry. It's not just the expensing of DOCs, but also the depreciation that would be questioned. From my perspective, there is a ton of use that is misclassified as business.

 

[Flying Illini]

From my perspective, there is a ton of use that is misclassified as business.

I had to highlight this b/c I found it humorous.
Very similar to how sitting presidents hit the campaign trail on the taxpayers dime all b/c they throw one policy speech in there in one city of a 4 city stop.

I have strong suspicions that some of what you are talking about took place at a mgmt company.


Sent from my iPhone using Tapatalk

 

[gret]

Not sure what you mean by the mgmt company reference.

The point about "sitting presidents" using Air Force One is very valid. Every other candidate has to pay for their own transportation and at least he should be using some of the money raised from his backers to reimburse the Treasury, even if it is a token amount in the whole scheme of things.

 

[hawkerflyer]

We're preparing for an eventual audit, not overly concerned about it. Leisure trips are a very small part of what we do and our principal has cut a check for the few non-business trips we've done. I am also hearing about more and more audits with the 91 community, though.

 

[con-pilot]

Well, you cannot declare war on corporate aviation without sending in the troops. The IRS are the initial shock troops.

But I would not worry too much about it, time after time it has been proven that usually high dollar corporate tax attorneys beat the IRS attorneys.

That's because a lot of corporate tax attorneys are former IRS agents or attorneys.

Back when I ran a corporate flight department after I left the government we were audited by the IRS. Our attorneys claimed that, I think, three trips were 'misclassified' and adjusted the return for that particular period and that was the last we heard of it. However, the owner of the company did pay for a lot of his trips claiming that there were personal. I was told that flight departments that claimed a near 100% usage of the aircraft were audited the most often.

Oh, I did know of one company that claimed 100% business use. The flight crews never flew on weekends or holidays that I knew of, they shared hangar space with us. They had great documentation, but the IRS refused believe all was business use, so the company compromised with the IRS and paid a very small tax penalty. After that, they started flying person use trips, figured if they were going to have to pay for personal use when they didn't do any, might as well do them and pay up front.

 

[H.Agenda]

Not sure what you mean by the mgmt company reference.

The point about "sitting presidents" using Air Force One is very valid. Every other candidate has to pay for their own transportation and at least he should be using some of the money raised from his backers to reimburse the Treasury, even if it is a token amount in the whole scheme of things.

its off the subject but your right it is valid. When they use it to campaign for reelection or the presidents wife uses it to go on 15 Millions dollars of vacation in 3 years, 10M by july last year, it really burns my ass when they come after my boss's nickel; which they wont get, but it will waste my time. When is the last time you ever heard of a 13 yr girl and 25 of her friends going to mexico without their parents and arrive via private jet?

he is not a man of the people.

http://www.dailymail.co.uk/news/art...used-spending-10m-public-money-vacations.html


http://www.nola.com/politics/index.ssf/2012/03/obamas_daughter_malia_vacation.html

 

[sky4]

We got the audit this year on our pt 91 KA 200 that belongs to our accounting firm and does fly 99.5% business trips. Have not heard yet what came out of it.

 

[TigerDriver]

heard of it for part 91 companies. Some companies like to use their assets in the name of "chairity" but an excessive amount of these flights gives the appearance of holding out to the public in the eyes of the FAA. When the cost deductions of these trips shows up on corporate tax returns the imperial federal govt. likes to send in its storm troopers, i.e. IRS auditors.

 

[BoilerUP]

We got audited 2, maybe 3 years ago.

I know it was an aggravation for the CFO but I think it ended up being a non-event...

 

[TMMT]

We've been audited before, but that had to do with some internal changes to our LLC that tripped a red flag at IRS and not anything we intentionally did.

But declaring war on corporate aviation is really a bad idea all the way around, cuz no matter what your party affiliation your big money donors, the ones who actually finance your campaign are all part of corporate aviation in one fashion or another.

 

[Kingairrick]

I bet we claim close to 100% business use. We rarely work weekends and never holidays. We get audited every year, and as far as I know, never get any discrepancies...Fortune 200 Company

 

[NJAowner]

The Federal government is stepping up audits at all levels in an apparent attempt to raise revenue. IRS, Customs, Immigration, Medicare, Dept of Education, Dept. of Labor have all sent auditors out in flocks, many times just after small tecnical violations, but getting fines and settlements. Aviation is not the only industry being targeted.