Notice 2005-45: The IRS Takes Aim at Executives’ Entertainment Use of Company Aircraft

The Tax Executive
06.30.05
In this article, Marianna Dyson and Fred Oliphant write that as a result of the legislative change to section 274(e)(2) of the Internal Revenue Code in the American Jobs Creation Act of 2004, the same able lawyers within IRS Chief Counsel who had unsuccessfully advocated the government’s position in Sutherland Lumber-Southwest, Inc. v. Commissioner found themselves empowered to write guidance implementing the new deduction disallowance with respect to such expenses. In May of this year, the Internal Revenue Service (IRS) released Notice 2005-45, which, if nothing else, clearly communicates to taxpayers who the real winners of the case ultimately were.
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