Tax Insight

Aircraft Quarterly Newsletter – Q3 2026

Insight
5 minute read
September 25, 2026

What happened?

First, in a July 2026 letter to Treasury Secretary Scott Bessent and IRS CEO Frank Bisignano, a group of Democratic senators requested that the IRS use its regulatory authority to close a jet ”loophole” created by the Standard Industry Fare Level (SIFL) valuation method that they assert allows the taxable value of personal use of company aircraft to be understated.

Second, the Department of Transportation (DOT) released the cents-per-mile rates and terminal charge for the second half of 2026 for the SIFL fringe benefits rules.

Why is it relevant?

Owners of business aircraft should be aware of the recent proposals related to private aviation as that could increase the taxable fringe benefit value associated with executives’ personal use of company-provided aircraft.

When an employer allows an employee to use a company-provided private aircraft for personal reasons, the employee generally receives a taxable fringe benefit. Under current law, the employer may choose to value these personal flights by either using (1) the general fair market value charter rate of a similar aircraft or (2) the special valuation rules known as SIFL.

Actions to consider

Taxpayers should track the progress of various proposals related to business aircraft and stay aware of future news releases and notices coming from the government related to private aviation matters that may be targeted at closing the jet “loophole.”

The SIFL rates for the second half of 2026 are effective for personal flights taken by employees on employer-provided aircraft between July 1, 2026, and December 31, 2026. Affected employers should review the aircraft flight logs to determine which flights taken during that period were personal in nature to calculate and report the appropriate taxable fringe benefit amount for their employees.