Aircraft Club July 2024: Tax treatment of flights by spouses and other individuals accompanying executives

In brief

What happened?  

As the IRS continues enforcement efforts related to corporate aircraft usage, exam teams may increase scrutiny of flights taken by executives, their spouses, and other accompanying individuals in evaluating the allocation of costs of jets between business and personal use. 

Why is it relevant?  

Deductions for flights taken by executives must satisfy specific requirements set forth in the regulations. If an executive’s spouse or other individual accompanies an executive on a trip, then the tax consequences of the trip to the executive individually and the taxpayer may depend on the purpose for which the spouse or other individual was on board for the trip. 

Action to consider

Taxpayers should identify and document the purpose of flights taken by executives, their spouses, and other accompanying individuals on company-provided aircraft to support the treatment of these costs for federal income tax purposes.