For aircraft owners, operators, and aviation businesses in Florida, tax audits can present serious financial and operational risks, especially when the tax authorities involved do not fully understand the intricacies of the aviation industry. At AVTax Advisors, PLLC, we provide skilled legal representation for high-net-worth individuals and aviation companies facing federal income tax audits, federal excise tax audits, and Florida sales and use tax audits. With our deep focus on aviation tax matters, we ensure your interests are protected throughout every stage of the audit process.
Why Aviation Tax Audits Are Unique
Aircraft-related transactions are governed by a web of overlapping federal and state tax laws. Many auditors lack aviation-specific knowledge, which often leads to incorrect assessments or misinterpretation of legitimate deductions, exemptions, and regulatory requirements.
At AVTax Advisors, PLLC, aviation tax is not a side practice—it is our core focus. We understand the operational, legal, and financial nuances that affect aircraft owners, operators, lessors, lessees, and brokers. Our Florida-based firm provides targeted audit representation that takes into account the unique realities of business aviation.
Federal Income Tax Audits
If the IRS audits you or your aviation-related entity for income tax issues, one of the primary focuses will be whether deductions related to aircraft ownership and operation were validly claimed. The IRS scrutinizes:
- Depreciation under Section 168 (bonus depreciation)
- Deductions under Section 162 for business use
- Personal vs. business use allocation
- Listed property substantiation requirements
- Compliance with entertainment disallowance rules under Section 274
We assist clients in assembling the documentation necessary to defend these deductions, including logbooks, business itineraries, corporate resolutions, and lease or usage agreements. Our team helps structure responses, manage interviews, and negotiate with IRS agents to minimize liability and avoid penalties.
Federal Excise Tax (FET) Audits
Federal excise tax applies to certain air transportation services and can be triggered when a flight is operated for compensation or hire, even if that was not the intended purpose. Common FET issues arise in:
- Time-share agreements
- Part 91 dry leases with pilot services
- Flight departments charging affiliates
- Aircraft management companies
The IRS frequently misapplies FET rules due to a lack of familiarity with FAA regulations and aviation business models. At AVTax Advisors, PLLC, we understand how to distinguish legitimate non-commercial operations from taxable air transportation services. We help clients prepare defensible arguments, clarify operational structures, and compile the necessary contractual and operational evidence to contest or reduce FET assessments.
Florida Sales & Use Tax Audits
Florida is known for its aggressive enforcement of sales and use tax laws related to aircraft. The Florida Department of Revenue (FDOR) regularly audits aircraft transactions and ownership for:
- Improper or missing documentation to support fly-away exemptions
- Use tax liability when an aircraft enters Florida airspace within six months of purchase
- Leases misclassified as purchases
- Noncompliance with resale or commercial use exemptions
Florida’s tax rules are highly technical and often misunderstood, both by taxpayers and auditors. For example, aircraft stored in Florida for maintenance may still trigger use tax liability unless specific documentation is submitted. At AVTax Advisors, PLLC, we assist clients in proactively gathering and presenting the necessary invoices, flight logs, maintenance records, and exemption certificates. Our goal is to demonstrate compliance or to negotiate favorable settlements when deficiencies are alleged.
What to Expect During the Audit Process
Regardless of the taxing authority involved, aviation tax audits generally follow a similar process:
- Initial Notice and Document Request: The audit begins with a formal notice and a request for specific documents (e.g., purchase agreements, flight logs, tax returns).
- Information Gathering and Analysis: We assist clients in compiling and organizing documents while identifying and analyzing potential weaknesses.
- Audit Interviews & Explanations: AVTax Advisors, PLLC acts as your representative, responding directly to auditor inquiries to ensure that statements made are accurate and carefully positioned.
- Findings & Proposed Adjustments: After reviewing your documentation, the auditor will issue preliminary findings. We respond with legal arguments, corrected documents, or counter-evidence.
- Negotiation or Appeals: If the proposed adjustments are unfavorable, we explore all options, including negotiated resolutions, appeals, or litigation where warranted.
Aviation-Specific Legal Experience You Can Trust
Unlike general tax practitioners, we speak the language of aviation. Our founding attorney, Letisha D. Sailor, is a Florida-licensed attorney with years of experience advising on aviation tax compliance, audit defense, and strategic planning. AVTax Advisors, PLLC works with aircraft owners, management companies, charter operators, and corporate flight departments across Florida, providing tailored representation that reflects the realities of your operations and the strictures of tax law.
Protect Your Investment. Preserve Your Rights.
If you’re facing a federal or state aviation tax audit—or simply want to prepare before one begins—don’t leave your defense to someone unfamiliar with the industry. At AVTax Advisors, PLLC, we combine aviation fluency with tax law experience to deliver a strategic advantage for aircraft owners and operators across Florida.
Facing a tax audit involving your aircraft? Contact AVTax Advisors, PLLC today for a confidential consultation and put your defense in the hands of Florida’s aviation tax law authority.