News
IRS Intends To Charge FET For "Part 91" Flights Conducted By Single Member LLC's and Qualified Sub-S Corps
by Scott Burgess, released on Monday, November 19, 2007
The final regulations (T.D. 9356) issued by the Internal Revenue Service (IRS) under the Self-Employment Contributions Act may affect the treatment of qualified subchapter S subsidiaries (QSubs) and single-member limited liability companies (SMLLCs) for the purposes of federal excise taxes (FET). The IRS may interpret the regulations, which will take effect on January 1, 2008, to treat an SMLLC or QSub as an entity that provides "transportation services" to its member or shareholder, thereby subjecting the contributions and payments to the SMLLC or QSub to the FET imposed under Internal Revenue Code Section 4261. Aircraft owners, including aircraft in fractional programs, having an aircraft or share in a QSub or SMLLC structure should contact Scott Burgess (scottb@aviationlegalgroup.com) to discuss the possible implications.
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