Current:Home > BackIRS says it has a new focus for its audits: Private jet use-Angel Dreamer Wealth Society D1 Reviews & Insights
IRS says it has a new focus for its audits: Private jet use
View Date:2024-12-24 10:23:21
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! (372)
Related
- All Social Security retirees should do this by Nov. 20
- Inflation cooled in June to slowest pace in more than 2 years
- World Talks on a Treaty to Control Plastic Pollution Are Set for Nairobi in February. How To Do So Is Still Up in the Air
- Will a Recent Emergency Methane Release Be the Third Strike for Weymouth’s New Natural Gas Compressor?
- DWTS’ Ilona Maher and Alan Bersten Have the Best Reaction to Fans Hoping for a Romance
- Scott Disick Spends Time With His and Kourtney Kardashian's Kids After Her Pregnancy News
- How Shanna Moakler Reacted After Learning Ex Travis Barker Is Expecting Baby With Kourtney Kardashian
- Warming Trends: Couples Disconnected in Their Climate Concerns Can Learn About Global Warming Over 200 Years or in 18 Holes
- Supreme Court seems likely to allow class action to proceed against tech company Nvidia
- Jan. 6 defendant accused of carrying firearms into Obama's D.C. neighborhood to be jailed pending trial
Ranking
- Japan to resume V-22 flights after inquiry finds pilot error caused accident
- The Oil Market May Have Tanked, but Companies Are Still Giving Plenty to Keep Republicans in Office
- Prince William’s Adorable Photos With His Kids May Take the Crown This Father’s Day
- Here’s Why Issa Rae Says Barbie Will Be More Meaningful Than You Think
- FC Cincinnati player Marco Angulo dies at 22 after injuries from October crash
- To all the econ papers I've loved before
- Warming Trends: Increasing Heat is Dangerous for Pilgrims, Climate Warnings Painted on Seaweed and Many Plots a Global Forest Make
- Six Takeaways About Tropical Cyclones and Hurricanes From The New IPCC Report
Recommendation
-
Today's Craig Melvin Replacing Hoda Kotb: Everything to Know About the Beloved Anchor
-
Florida Power CEO implicated in scandals abruptly steps down
-
Scientists Join Swiss Hunger Strike to Raise Climate Alarm
-
A recession might be coming. Here's what it could look like
-
'Red One' review: Dwayne Johnson, Chris Evans embark on a joyless search for Santa
-
Brody Jenner and Tia Blanco Are Engaged 5 Months After Announcing Pregnancy
-
Let Your Reflection Show You These 17 Secrets About Mulan
-
Suspect arrested in Cleveland shooting that wounded 9