Current:Home > StocksIRS says it has a new focus for its audits: Private jet use-DB Wealth Institute B2 Expert Reviews
IRS says it has a new focus for its audits: Private jet use
View Date:2024-12-24 00:46:16
First, there were trackers on Taylor Swift and other celebrities' private jet usage. Now, the IRS is scrutinizing businesses' use of private aircraft, with the tax agency announcing that it will ramp up audits of corporate jets.
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. The push is part of the agency's ongoing mission of going after high-wealth tax cheats and businesses that game the tax system at the expense of American taxpayers.
With the tax agency flush with billions in new funding, thanks to the 2022 Inflation Reduction Act (IRA), the IRS is beefing up hiring of enforcement agents to increase its auditing activities. Earlier this month, the IRS said the boost is paying off, and forecast that it will reap hundreds of billions of dollars of additional tax revenue by going after overdue and unpaid taxes.
As part of that effort, the IRS is also pursuing businesses that skirt tax laws, such as companies that allow executives to use corporate jets for their personal use.
"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 January 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. Many can be fully deducted.
The tax benefits of corporate jets
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.
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."
- In:
- Internal Revenue Service
- Taxes
veryGood! (1922)
Related
- Taylor Swift touches down in Kansas City as Chiefs take on Denver Broncos
- Suspected arson attack in Nice, France kills 7 members of same family, including 3 children
- Can Hollywood navigate AI, streaming wars and labor struggles? | The Excerpt
- Check your VPN, abortion seekers. New 'Vagina Privacy Network' aims to keep data safe
- Historian Doris Kearns Goodwin to kick off fundraising effort for Ohio women’s suffrage monument
- Deion Sanders got unusual publicity bonus from Colorado, records show
- US appeals court allows EPA rule on coal-fired power plants to remain in place amid legal challenges
- To test the Lotus Emira V-6, we first battled British build quality
- Trump has promised to ‘save TikTok’. What happens next is less clear
- FACT FOCUS: A look at claims made at the Republican National Convention as Trump accepts nomination
Ranking
- Lee Zeldin, Trump’s EPA Pick, Brings a Moderate Face to a Radical Game Plan
- High temperatures trigger widespread fishing restrictions in Montana, Yellowstone
- U.S. stock trading unaffected by IT outage, but Crowdstrike shares tumble
- Clark, Reese on same team at WNBA All-Star weekend and in spotlight in matchup against Olympic team
- Why was Jalen Ramsey traded? Dolphins CB facing former team on 'Monday Night Football'
- Nevada judge who ran for state treasurer pleads not guilty to federal fraud charges
- Georgia Gov. Brian Kemp journeys to Italy in eighth overseas trip
- Harvey Weinstein's New York sex crimes retrial set to begin in November
Recommendation
-
Homes of Chiefs’ quarterback Mahomes and tight end Kelce were broken into last month
-
Your flight was canceled by the technology outage. What do you do next?
-
Jon Gosselin Accuses Ex Kate Gosselin of Parent Alienation Amid Kids' Estrangement
-
Member of eBay security team sentenced in harassment scheme involving bloody Halloween pig mask
-
Jana Duggar Reveals She's Adjusting to City Life Amid Move Away From Farm
-
Jon Gosselin Accuses Ex Kate Gosselin of Parent Alienation Amid Kids' Estrangement
-
Two deaths linked to listeria food poisoning from meat sliced at deli counters
-
The bodies of 4 Pakistanis killed in the attack on a mosque in Oman have been returned home