The IRS will pursue business private jet usage in a new round of audits on high-wealth taxpayers – NBC News

first, taylor swift tracker and other celebrities’ private jet usage. Going forward, there will be even more scrutiny on executives’ personal use of business aircraft, which is recorded as an expense in taxes.

IRS leaders announced Wednesday that as part of the agency’s continued mission to pursue high-value tax fraud, the agency will investigate companies’ private jets and how they are used personally by executives and written off as tax deductions. announced that it would launch dozens of audits to determine whether the Abusing the tax system at the expense of American taxpayers.

The IRS said the audit will focus on aircraft used by large corporations and high-income taxpayers and whether the tax purposes of using the jets are properly allocated.

“At a time when millions of hard-working taxpayers are paying their taxes, we want you to have confidence that everyone is following the same rules,” IRS Commissioner Daniel Werfel said in a preview of the announcement. He spoke on the phone with reporters. Tax season started on January 29th.

“These aircraft audits will help ensure that high-income groups are not acting in disregard of their tax obligations,” he said.

According to the IRS, there are more than 10,000 corporate jets in the United States with a value in the tens of millions of dollars, many of which are fully deductible.

The Tax Cuts and Jobs Act, passed during the Trump administration, allows 100% bonus depreciation and expense treatment for private jets, allowing taxpayers to pay for the cost of aircraft purchased and put into service between September 2017 and January 2023. It was approved to be written off.

Werfel said federal tax collectors will use resources from the Democratic Party’s anti-inflation law to take a closer look at the use of private jets. The use of private jets has not been closely scrutinized as funding has declined sharply over the past decade. “Our audit rates are poor,” he said by phone. IRS April 2023 Report on tax audit data The law states that “continued resource constraints limit the agency’s ability to address costly noncompliance” and for the 2018 tax year, those with income of $10 million or more said its audit rate was 9.2%, down from 13.6% in 2012. During this period, the overall corporate audit rate fell from 1.3% to 0.6%.

Werfel said there could be more audits related to aircraft use in the future, depending on the results of initial audits and as the IRS continues to hire inspectors.

“To be clear, not all partnerships and corporations in the high income category avoid tax obligations,” Werfel said. “But that means the IRS has more work to do to make sure people pay what they’re owed.”