The IRS will soon conduct audits on businesses' private jets to ensure that executives are not abusing tax deductions.
The audits will focus on aircraft usage by large corporations, large partnerships and high-income taxpayers and whether for tax purposes the use of jets is being properly allocated between business and personal reasons.
The audits aim to prevent high-income groups from evading their tax responsibilities. Currently, there are over 10,000 corporate jets in the U.S., many of which can be fully deducted.
The Tax Cuts and Jobs Act allowed for 100% bonus depreciation and expensing of private jets, which further incentivized taxpayers to write off the cost of aircraft.
The IRS plans to use resources from the Inflation Reduction Act to closely examine private jet usage. Learn more.