Press Release

Issued by National Air Transportation Association.

July 14, 2017

Today, in a note to the NATA membership, association president Martin H. Hiller announced the IRS has informed NATA of its decision to no longer pursue existing audits where the agency sought assessment of the commercial transportation federal excise tax (FET) on fees paid for aircraft management services. Recognizing that these tax audits have been ongoing for several years, often in a suspension status, the IRS confirmed to NATA that it is in the process of informing taxpayers that FET audits on the aircraft management fee issue will be closed in the interest of sound tax administration. 

“NATA appreciates the IRS’s recognition of the urgent need to provide tax relief to impacted companies. It is a significant step toward the ultimate resolution of the FET applicability issue,” stated Hiller.

According to the IRS, companies that have been under FET audit should expect to receive written notification from the agency soon. At this time, there is no specific timetable available for delivery of all notices, but several NATA members have already reported receipt of their IRS notification. Importantly, while companies should expect notification that the management fee issue will be closed, this action from the IRS relates only to that issue and not to any other open audit matters.

“The agency’s decision is a testament to NATA’s regulatory advocacy and is a significant victory for NATA members and the aircraft management industry. We have regularly met with the IRS and Treasury Department, arguing the FET audits are unfair and that management companies deserve a favorable resolution.  The association will continue to advocate on this issue at the IRS, Treasury Department, and Congress with the objective of achieving clear and uniform application of the FET consistent with legislative intent,” concluded Hiller.