Page 451 - Small Business IRS Training Guides

Audits Prior to Enactment of IRC § 4261(e)(5)

Although the exemption for amounts paid for certain aircraft management services enacted as part of the TCJA became

effective December 23, 2017, the IRS will not pursue the IRC § 4261 tax on amounts paid for aircraft management
services prior to the enactment of the exemption if such amounts paid would have been exempt under IRC § 4261(e)(5)

if the provision was in effect at the time of payment.

Summary

Main Points

Effective December 23, 2017, certain payments made by an aircraft owner (or, in certain cases, a lessee) related to the
management and operation of aircraft are exempt from the excise taxes imposed on taxable transportation by air.

This exemption generally applies to maintenance and support of the aircraft owner’s aircraft, and on flights by the aircraft

owner on their own aircraft.

Although the exemption for aircraft management fees created by the TCJA became effective December 23, 2017, the IRS

will not pursue excise tax on amounts paid for aircraft management services prior to the enactment of the exemption if

such amounts paid would have been exempt under IRC 4261(e)(5) if the provision was in effect at the time of payment.

73233-102 13822-7 Tax Cuts and Jobs Act