Defending Federal Income and Excise Tax and State Sales and Use Tax Audits

IRS and State Tax Audits

The tax attorneys in GKG Law's business aviation group have extensive experience representing clients under audit by the IRS or state tax authorities.  When the government comes calling to review income, excise or sales tax issues relating to business aircraft, you need a team of experienced attorneys who have the knowledge that is required to represent your interests competently.  In a tax audit, the government is always represented by a team of well-trained specialists, including attorneys and accountants.  The tax attorneys in the business aviation group at GKG Law have the knowledge and experience that you need to level the playing field when dealing with the government and its specialists in a tax audit.

GKG Law tax attorneys have successfully represented business aircraft owners and aircraft management companies in connection with the defense of high dollar tax audits involving a wide array of issues including:

  • IRS Income Tax Audits
    • Characterization of business aircraft ownership and operating expenses as
      • Not ordinary, necessary and reasonable in nature
      • Non-deductible "passive activity" losses
      • Non-deductible "hobby" losses
      • Non-compliant with "qualified business use" requirements
      • Non-deductible because the aircraft owner is not "at-risk"
    • Application of SIFL rules
    • Application of personal entertainment use (Jobs Act) deduction limitation rules
  • IRS Excise Tax Audits
    • Determination of which party has possession, command and control of an aircraft
    • Calculation of amounts subject to Federal excise tax
    • Denial of fuel tax refunds and credits
    • Assessments of tax for fuel tax credits previously claimed
    • Application of Trust Fund Recovery Penalty to Specified Individuals
  • State Sales and Use Tax Audits
    • Application of sales or use tax to an aircraft acquisition or disposition and to aircraft leases and operations
    • Denial of sales and use tax exemptions such as
      • Sales for resale
      • Commercial aircraft sales
      • Casual, isolated or occasional sales
      • "Fly-away" transactions
    • Determination of taxable nexus with a particular state
    • Application of credits for sales and use taxes paid to other states