Taylor Swift’s recent private jet flight from Japan to the Super Bowl in Las Vegas has sparked interest not only among her fans but also within the Internal Revenue Service (IRS). The IRS has announced plans to conduct numerous audits on business aircraft, particularly focusing on personal use.
Under the tax code, business aircraft expenses can be tax-deductible if the asset is primarily used for business purposes. However, distinguishing between business and personal use can be intricate, leading to challenges in record-keeping.
Ownership structures of private aircraft can further complicate matters, potentially resulting in federal excise taxes on air transportation. The deductibility of private flights depends on various factors, including the flight's purpose and the availability of commercial alternatives.
For individuals concerned about potential IRS audits, maintaining detailed records is crucial. Key information to document includes flight details, passenger manifests, and the business purpose of each flight.
The Tax Cuts and Jobs Act of 2017 introduced a temporary 100 percent deduction for certain business assets, such as private jets, acquired between September 27, 2017, and January 1, 2023. This incentive, coupled with increased IRS funding and scrutiny on high-income taxpayers, has led to a heightened focus on private jet usage.
IRS Commissioner Denny Werfel emphasized the agency's commitment to ensuring that high-income individuals and organizations comply with federal tax laws. As the IRS intensifies efforts to target wealthy taxpayers, those potentially subject to private jet audits are advised to seek guidance from tax professionals to prepare for potential scrutiny.
