Podcast: Play in new window | Download (Duration: 11:05 — 10.2MB)
Subscribe: Apple Podcasts | Email | TuneIn | RSS
Post By: Adam Turteltaub
Corporate jets come with large fuel bills and, as we learn in this podcast from Lori McGee, partner at Jetstream Law, substantial compliance requirements.
It begins with the registration, which, perhaps to the surprise of many, include US citizen requirements for officers of the corporation. In addition, some of the rules are fairly nuanced. Any changes to corporate ownership or even membership changes to an LLC may trigger an obligation to update information on file with the FAA. It may sound like a technicality, but if the aircraft is involved in an incident, having the incorrect information on file may be sufficient for the insurer to claim the aircraft wasn’t properly operated.
Thinking about allowing personal use of the aircraft by an executive? Before you do so, you need to consider both FAA and IRS rules she cautions. Having the executive reimburse the company can be problematic on the FAA side since they general prohibit seeking reimbursement. On the IRS side, if use of the jet is treated as a benefit, there may be tax implications. And, if the organization is publicly-traded, there may be SEC considerations as well.
Even maintenance issues have compliance requirements since aircraft financial firms may require the aircraft to be enrolled in a maintenance or parts program. If the mechanic or pilot don’t know that and jettison the program to save cost, it could prove costly.
Listen is to learn more about the compliance perils of private aviation.