IRS Coming For Your Private Jet Deductions, Watch Out!
How rude!
As promised when the Inflation Reduction Act increased funding for the Internal Revenue Service to hire new staff and upgrade computers so the government could go after wealthy tax cheats, the IRS is continuing to go after wealthy tax cheats, with another new enforcement effort starting this week. The Associated Press reports the agency will be sending “noncompliance letters” to 125,000 rich people who haven’t filed tax returns, some going back as far as 2017.
Specifically, the IRS will be putting on notice some 25,000 people earning over a million smackers a year, and another 100,000 with incomes between $400,000 and $1 million who failed to pay taxes between 2017 and 2021. The letters will read Hi! We noticed you didn’t file, ya lousy rich barstids! Time to pay the piper!
At least we hope they do.
This isn’t the first such crackdown; last fall the IRS targeted some 1,600 millionaires with overdue taxes of $250,000 or more, just one of several campaigns aimed at recovering taxes from rich people who somehow allowed their tax obligations to slip their minds. You know, rich people, that Steve Martin bit about how to be a millionaire and never pay taxes was only a comedy bit, really!
In line with Joe Biden’s campaign pledge in 2020, the IRS is only increasing audits and enforcement efforts against people making over $400,000 a year. Per the AP:
“When people don’t file a tax return they’re required to, it’s not fair to those hardworking taxpayers who responsibly do their civic duty under the laws of our nation,” IRS Commissioner Daniel Werfel told reporters Thursday morning.
“And when people don’t file their taxes, they need to know there’s a consequence.”
The new enforcement campaign follows an announcement last week that the IRS will ramp up audits of wealthy executives’ tax writeoffs for business jets, to make sure that the tax deductions are only covering actual business expense and not, say, hauling Supreme Court justices to Alaska for fishing trips.
And yes, Commissioner Werfel had an appropriate tag line for that one too, telling reporters on a conference call that during tax time, “when millions of hardworking taxpayers are working on their taxes, we want them to feel confident that everyone is playing by the same rules,” and adding, “These aircraft audits will help ensure high-income groups aren’t flying under the radar with their tax responsibilities.”
We bet Werfel could’ve offered other high-flown metaphors about how rich tax cheats need to cool their jets, or to straighten up and fly right, but he is a tax commissioner, not a mere Wonkette wretch, so his language tends to be more grounded.
The AP also reminds us that Donald Trump’s 2017 Big Fat Tax Cuts for Rich Fuckwads Act “allowed for 100% bonus depreciation and expensing of private jets,” meaning that America’s wealthy and corporate people could write off the entire cost of “aircraft purchased and put into service between September 2017 and January 2023.”
That doesn’t mean that richies and corporates can also write off every trip to Bermuda, though, so that’s why the IRS will be scrutinizing the jets’ use more closely.
Beyond enforcing existing regulations on reporting jet use, the IRS could also tighten up the rules governing taxable flights, said Mike Kaercher, senior attorney advisor at the Tax Law Center at NYU:
“The current rules allow these flights to be significantly undervalued, enabling wealthy filers to pay much less in taxes than fair market value would dictate, and it’s within the IRS’ authority to revise these rules,” Kaercher said.
Well hey, let’s do that too! And when Dems actually have a governing majority again, how about rolling back that Trump-era rule allowing a writeoff for corporate jets, too? No sense in subsidizing the carbon emissions of the super wealthy, after all.
PREVIOUSLY IN OUR FRIENDS, THE IRS!
[AP / AP again / Image by ‘Hush Hush,’ Creative Commons License 2.0]
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Like a college writing teacher, the IRS is out to check your Citations. And your Gulfstreams. And your Bombardiers, even.
(Audit him! Audit the Bombardier!)
The Children of Kali will no doubt have something to say about all those jets.