Large companies beware: Accounting Today, CFO Dive, CNBC, the Wall Street Journal, and Bloomberg Tax reported that the IRS plans to conduct focused audits on the personal use of corporate jets by executives of large companies and partnerships to determine whether reported business tax deductions are appropriate.
After years of underfunding, we now have the resources to more fully address high-risk areas of noncompliance," said IRS Commissioner Danny Werfel during a press conference Wednesday. "The IRS is announcing that we are beginning dozens of new audits on corporate aircraft involving personal use. We are focusing on aircraft usage by large corporations, large partnerships and high-income taxpayers. The IRS is concerned that the use of these jets isn't being properly allocated between business and personal activities. This means that we are concerned people are using business aircraft for personal use and, in turn, then taking the business deduction they may not be fully entitled to personal use of corporate jets and other aircraft by executives and others have personal and business tax implications." [Accounting Today]
The WSJ article cites examples of companies that recently reported substantial amounts for executive travel via their corporate jets.
See Skadden’s post, which discusses the relevant IRS regulations.
This post first appeared in the weekly Society Alert!