"zatatime" wrote in message
...
On Thu, 13 May 2004 22:11:00 -0700, "C J Campbell"
wrote:


"zatatime" wrote in message
.. .

I'd be very careful with this one. AOPA actually has a kit you can
get outlining previous cases of aircraft use for business and some pit
falls and advantages. What I remember is that the IRS (during an
audit) got quotes on airfares for the time frame in question and
allowed only that much as the right off. The excess was assessed as
taxable with penalties and interest.


This is an illegal and unreasonable position that has no basis in either
the
code or the regs. The IRS would be liable for very stiff penalties and
legal
fees if it actually tried to defend this position in court. The courts
have
ruled repeatedly that the IRS cannot force people to deduct only what the
least possible cost is.



I'm not agreeing with what happened, just stating that it did. I
don't remember if it was challenged or not.

It is the sort of thing that might have happened some years ago. Back in
those days, if Congress would not pass a tax law the IRS wanted, then the
IRS would simply write it into the regulations. Or they might simply have an
interpretation of the regulations that was contrary to the law. Since
taxpayers could not file a class action suit against the IRS, the IRS would
generally collect what they wanted -- it was more expensive to sue the
government than the refund was worth.

My father, a senior tax partner for Ernst and Young, spoke about this at a
CPA convention, openly accusing the IRS of 'legislating.' In those days a
CPA would never publicly criticize the IRS. The phone at his office was
ringing even before he left the convention hall. I was studying for the CPA
exams myself at the time and a lot of people asked me about it. The general
feeling was that it was about time somebody said something. It was one of
the first cracks in the wall that kept the IRS from accountability.

Nowadays if the IRS adopts such an unreasonable position the courts can (and
frequently do) order the IRS to pay the claimant's legal fees, as well as
some penalties. Taxpayers are now accorded certain rights under the law,
which they did not have before.

Now, if we could just bring the FAA to the same level of accountability....