From:
Jeffrey Epstein <
[email protected]>
Sent:
Thursday, September 19, 2013 10:54 PM
To:
Melanie Spinella
Subject:
Fwd: Avioneta Holdings, LLC
Forwarded me=sage
The "revenue" contrib=ted to the LLC to manage the aircraft is no longer considered revenue (it =as
prior to May 2013).
<=p>
Anything paid to the LLC =bove the calculated revenue based on hours is in capital contributions.=/u>
<=p>
c=p>
<=p>
c=p>
c=p>
where is the 9 million in reevnue
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On Thu Se 19 2013 at 4:09 PM Thomas Turrin «= href="mailto
/=» wrote:
Jeffrey,
I revised the amount of Leon's "private use inco=e" in the attached tax
treatment schedule. Using the flight hours for=2012, I calculated the average per-hour
rate (dom/int I) to be $9,110. I applied that h=urly rate to the personal-use hours
for 2012 (137.7). Business hours (per Apollo p=yment statements) were assumed
the same.
Michael Volpe of Jet Aviation confirmed that the rep=rted hours and mileage shown on their
monthly statements is all-inclusive.
The total amount paid by Leon to the LLC above the c=mputed flight revenue was considered
capital contribution. The portion of the capit=l contribution related to operating, managing and
maintaining the aircraft is shown at the bottom of t=e schedule. Until May 2013,
amounts paid by the owner for management, mainten=nce, pilot costs (etc) to management
company were considered to be taxable for excise =ax by IRS —this has been suspended (see below).
The excise tax computed is based on business flights=- assuming all domestic flights.
However, international flights (over 200 miles from =S border) are not subject to excise tax.
Since much of the flight time is international, the =xcise tax could be significantly less.
I'm available to discuss.
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Tom
From NBAA....
On May 16, 2013, the IRS informally announced tha= it will suspend the assessment of Federal Transportation Excise Tax
(FET) on owner flights on aircraft managed by aircraft management compa=ies. In a new article, NBAA Tax Committee
Member John Hoover reviews t=e implications of this suspension on assessments, summarizes meetings and =fforts by
NBAA leading up to this suspension on assessments, and discusses expected future guidance from the=l RS on this issue
IRS =uspends Federal Excise Tax Assessments on Aircraft Management Company Fees
Gary I. Horowitz <http://www.wileyrein.com/profession=ls.cfm?sp=bio&id=489>
May 21, 2013 I Airworthy Alert
The Internal Revenue Service (IRS) is suspendi=g Federal Excise Tax (FET) assessments of aircraft management
companies un=er audit, while the IRS develops guidance on FET specific issues affecting private aircraft operations.
The Tax Code imposes a 7.5% FET on the amount =aid for domestic air transportation services provided by aircraft
charter =perators and commercial airlines. FET can also be imposed by the IRS on non-commercial flight operations.
Over the last several year=, the IRS has aggressively audited aircraft management companies, and has =laimed that the
aircraft management fees paid by an owner to its aircraft =anagement company are subject to FET, even when the
aircraft is operated by the owner under FAR Part 91.
In a 2012 Chief Counsel Advice memorandum, an =ircraft owner hired a management company to oversee aircraft
operations, p=id the management company a monthly management fee and reimbursed pilot employment and training
costs. The IRS determined that th= management company provided taxable transportation to the aircraft's ow=er and
that FET was due on the monthly management fees and pilot reimburse=ents. However, this new IRS position is
inconsistent with prior guidance and creates confusion.
In response, representatives of the National B=siness Aviation Association (NBAA) and National Air Transportation
Associa=ion (NATA) met with IRS officials to request clear guidance on FET as applied to aircraft operated privately by
owners using aircraft =anagement company services.
In consideration for the concerns of NBAA and =ATA, the IRS will suspend FET assessments on current audits until the IRS
=evelops formal guidance and audit standards for both future FET liability and past activity. IRS guidance is expected to
be pro=ided within several months.
In light of the IRS's FET activity, private =ircraft owners using aircraft management company services should review =heir
arrangements to clearly establish that, for FET purposes, the aircraft owner has possession, command and control over
its aircraft a=d the management company is merely acting as the owner's agent.
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For more information, please contact <http://www.wileyrein.com/professionals.cfm?sp=bio&id=489= target=>
THOMAS TURRIN, CPA</=>
Partner
Raich Ende Maker & Co. LLP
1375 Broadway
New York, New York =0018
ext 404)</=>
(Direct line)=u>
(Fax)<=>
(Cell)=u>
Email:
Website: www.rem•co.com <http://www.rem-co.com>
</=>
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