NATA HOLDS BREAKTHROUGH MEETING WITH IRS ON FEDERAL EXCISE TAX ISSUE

Alexandria, VA, May 16, 2013 – The Internal Revenue Service (IRS) today informed the National Air Transportation Association (NATA) that the agency will suspend potential assessments associated with current ongoing audits of aircraft management companies that are facing significant uncertainty as to their potential Federal Excise Tax (FET) liability.

Moreover, the IRS indicated that it would move forward toward developing new guidelines on the application of FETs with respect to this issue. We anticipate, in the coming months, that guidance will be developed to clarify future actions and audit standards, per the discussion with IRS officials earlier today.

Last week, NATA staff along with Marian Epps of Epps Aviation, Nel Stubbs of Conklin & de Decker, and representatives from the National Business Aviation Association (NBAA), met with senior IRS officials from the Small Business/Self Employed Division (SBSE) to make the case for clear and precise guidance on the scope of FETs on owner-operated use of aircraft being utilized in an aircraft management agreement.

“During this meeting, we strongly advocated our case and IRS officials did an outstanding job of tackling our concerns. They asked that we give them a week to review and they came back to us today with a decision to complete open audits but suspend any potential assessments until new guidance on the application of the FETs is developed,” said NATA President and CEO Thomas L. Hendricks.

“We have come a long way with the IRS on this and we effectively reversed their views on how the industry functions and what the rules should be. I am very appreciative of the dialogue and professionalism these IRS officials displayed during this process. After sitting down with them face to face, I believe they have a better understanding of our industry. We have more to do and we will continue to work with the Service in a constructive and professional manner,” concluded Hendricks.

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NATA, the voice of aviation business, is the public policy group representing the interests of aviation businesses before Congress and the federal agencies.