UNITED STATES NEWS

IRS to pursue business private jet usage in new round of audits on high-wealth taxpayers

Feb 21, 2024, 12:02 PM

FILE - Private jets sit parked at Scottsdale Airport Jan. 27, 2015, in Scottsdale, Ariz. IRS leader...

FILE - Private jets sit parked at Scottsdale Airport Jan. 27, 2015, in Scottsdale, Ariz. IRS leadership said Wednesday, Feb. 21, 2024, that the agency will start up dozens of audits on businesses' private jets and how they are used personally by executives and written off as a tax deduction — as part of the agency's ongoing mission of going after high-wealth tax cheats who game the tax system at the expense of American taxpayers. (AP Photo/Ross D. Franklin, File)
Credit: ASSOCIATED PRESS

(AP Photo/Ross D. Franklin, File)

WASHINGTON (AP) — First, there were trackers on Taylor Swift and other celebrities’ private jet usage. Now, there will be more scrutiny on executives’ personal use of business aircraft who write it off as a tax expense.

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 — as part of the agency’s ongoing mission of going after high-wealth tax cheats who game the tax system at the expense of American taxpayers.

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.

“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 Jan. 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 and many can be fully deducted.

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.”

United States News

Associated Press

Autoworkers union celebrates breakthrough win in Tennessee and takes aim at more plants in the South

DALLAS (AP) — The United Auto Workers’ overwhelming election victory at a Volkswagen plant in Tennessee is giving the union hope that it can make broader inroads in the South, the least unionized part of the country. The UAW won a stunning 73% of the vote at VW after losing elections in 2014 and 2019. […]

1 hour ago

Associated Press

Conditions improve for students shot in Maryland park on ‘senior skip day’

GREENBELT, Md. (AP) — Three of the five youths shot in a suburban Washington, D.C., park during a high school “senior skip day” gathering have been released from the hospital, while the condition of the most seriously injured has improved, authorities said Saturday. Police in Greenbelt, Maryland, are asking the public to share video footage […]

2 hours ago

Associated Press

New York lawmakers pass $237 billion budget addressing housing construction and migrants

ALBANY, N.Y. (AP) — New York lawmakers passed a $237 billion state budget Saturday that includes plans to spur housing construction and combat unlicensed marijuana stores. The package also includes a raft of other measures ranging from expediting the closure of some state prisons, addressing the recent influx of migrants, and continuing the pandemic-era policy […]

2 hours ago

SANTA FE, NEW MEXICO - DECEMBER 9, 2019: A copy of the record album, 'Johnny Cash at Folsom Prison'...

Associated Press

Record Store Day celebrates indie retail music sellers as they ride vinyl’s popularity wave

Record Store Day, a holiday invented at a gathering of independent record store owners and employees in 2007, will be observed Saturday.

6 hours ago

Associated Press

Former Arkansas governor, US Sen David Pryor dies at 89

LITTLE ROCK, Ark. (AP) — Former Arkansas governor and U.S. Sen. David Pryor, a Democrat who was one of the state’s most beloved political figures and remained active in public service in the state long after he left office, has died. He was 89. Pryor, who went undercover to investigate nursing homes while a congressman, […]

6 hours ago

Associated Press

A rabbi serving 30 years to life in his wife’s contract killing has died, prison officials say

TRENTON, N.J. (AP) — The New Jersey rabbi serving a decadeslong sentence in a 1994 murder-for-hire plot targeting his wife has died. Fred Neulander, 82, was pronounced dead shortly after 6 p.m. Wednesday at a hospital in Trenton after he was found unresponsive in his cell in the New Jersey State Prison infirmary, news outlets […]

6 hours ago

Sponsored Articles

...

COLLINS COMFORT MASTERS

Here are 5 things Arizona residents need to know about their HVAC system

It's warming back up in the Valley, which means it's time to think about your air conditioning system's preparedness for summer.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

IRS to pursue business private jet usage in new round of audits on high-wealth taxpayers