Compliance

Airplane audits: IRS to track corporate jet usage for tax cheats

They’re going airplane mode.
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Annissa Flores

· less than 3 min read

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Elon Musk and Taylor Swift aren’t the only ones with extra eyes on their airplanes.

On Wednesday, the IRS announced plans to perform audits on executives’ personal use of business aircraft. Dun dun dun.

The audits will focus on aircraft used by large corporations and high-income taxpayers, with the aim of determining who's using business tax deductions for personal travel.

While tax deductions for corporate jets are permitted under US law, that only extends to business use, meaning it shouldn’t include every time the CEO is sipping a marg in Tulum.

“Personal use of corporate jets and other aircraft by executives and others have tax implications, and it’s a complex area where IRS work has been stretched thin,” IRS Commissioner Danny Werfel said in a statement, noting that expanded resources have now allowed further inquiry into the topic.

“These aircraft audits will help ensure high-income groups aren’t flying under the radar with their tax responsibilities,” he added. (Pun intended, we hope.)

The airplane audits are part of the agency’s broader efforts to more heavily monitor the country’s wealthiest taxpayers, with funding from the Inflation Reduction Act. Outside the new corporate jet audits, the IRS is working to strengthen compliance in other “complex, overlooked high-dollar areas,” such as pursuing millionaires who haven’t paid “hundreds of millions of dollars in tax debt.”

The agency also stressed that the number of airplane audits “could increase in the future following initial results and as the IRS continues hiring additional examiners.”

Billionaires are shaking in their boots.

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.