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Cleared for Take Off: The IRS’s New Business Aircraft Campaign Poised to Examine Large Corporations, Large Partnerships, and High-Income Individual Filers by Michel R. Stein and Michael Greenwade

Using a portion of the tens of billions of dollars now set aside for enhanced IRS enforcement under the Inflation Reduction Act of 2022 (the “IRA”),[1] the IRS announced a new campaign under its Large Business & International (LB&I) Division: The Business Aircraft Campaign (the “BAC”) on February 21, 2024.[2] In an effort to ensure tax compliance and increase awareness related to the business aircraft regulations and reporting requirements, the IRS[3] plans to substantially increase its issued-focused examinations to determine whether large corporations, large partnerships, and high-income individual filers are properly allocating private aircraft flights between business and personal use and whether fringe benefit inclusions are properly addressed.[4]  While this is part of a larger effort[5] the IRS is taking to ensure large corporate, large partnerships and high-income individual filers are paying their fair of taxes, the IRS will begin with “dozens” of these BAC audits.[6]

[1] The amount was once $80 billion but was decreased to $60 billion by the Fiscal Responsibility Act of 2023; https://www.congress.gov/bill/118th-congress/house-bill/3746.
[2] https://www.irs.gov/businesses/corporations/lbi-active-campaigns#collapseCollapsible1709079673889_469816.
[3] Id.
[4] Id.
[5] The IRS’s news release discussing new initiatives using the IRA: https://www.irs.gov/newsroom/irs-ramps-up-new-initiatives-using-inflation-reduction-act-funding-to-ensure-complex-partnerships-large-corporations-pay-taxes-owed-continues-to-close-millionaire-tax-debt-cases.
[6] IR-2024-46 (February 21, 2024).

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