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Review the 2014 Tax Conference Attendee Brochure (990 KB, PDF)
Day 1: Sunday, October 19, 2014
- 8:30 a.m. – 9:00 a.m.
- Conference Overview, Format and Learning Objectives
Stewart Lapayowker, Stewart H. Lapayowker, P.A; Scott O’Brien, NBAA
- 9:00 a.m. – 10:00 a.m.
- Ownership and Operating Structures 101:
Navigating the FARs
Gary Garofalo, Garofalo Goerlich Hainbach (moderator); Ryan DeMoor, Amway; David Hernandez, Vedder Price
Learn how to develop an aircraft ownership and operating structure that complies with the Federal Aviation Regulations (FARs) and allows for flexibility to support business aircraft operations. Key distinctions among Parts 91, 91K, 135 and 125 of the FARs that must be understood prior to creating an ownership and operating structure will be discussed. Learn about common structures and understand why they are created to deal with certain FAR issues. This panel will set the stage for an analysis of federal income tax and documentation issues.
- 10:00 a.m. – 10:30 a.m.
- Morning Break
- 10:30 a.m. – 11:30 a.m.
- Ownership and Operating Structures 102:
Federal Income Taxes
Jeff Towers, TVPX 1031 Exchange Co. (moderator); Lisa Holt, Cooling & Herbers; Keith Swirsky, GKG Law
Understand how to analyze the federal income and federal excise tax (FET) implications of several common FAA-compliant aircraft ownership and operating structures and the pros and cons of each, including differences in tax treatment between Part 91 vs. Part 135 operations. The rules for deducting expenses will be discussed, including a review of the limitations imposed by passive activity loss, hobby loss and personal use rules, as well as tax depreciation and like-kind exchange. This panel will create a framework for later sessions in which these topics will be discussed in detail.
- 11:30 a.m. – 12:30 p.m.
- Ownership and Operating Structures 103: Documentation
Doug Stewart, AircraftLogs (moderator); Kellie Rittenhouse, Hangar Aviation Management; Ellen Urell, Geller & Company
Learn how flight department professionals, in-house experts and outside advisors can create a documentation and record keeping strategy for the flight operations. Building on earlier sessions, determine which documents and records must be kept for FAA, IRS, SEC, legal and human resources purposes, and the types of internal systems and software solutions flight departments use to assist with managing documentation and recordkeeping.
- 12:30 p.m. – 1:30 p.m.
- 1:30 p.m. – 2:30 p.m.
- Breakout Sessions
Option A: Is Aircraft Leasing and Financing Back?
Jason Huff, Moore & Van Allen; Ed Kammerer, Hinckley Allen; Alvaro Pascotto, Law Offices of Alvaro Pascotto
Explore key issues in aircraft finance for banks and borrowers, including: What aircraft finance solutions are buyers looking for? Is my aircraft acquisition a bankable deal? Who is providing aircraft financing in today’s market and what products are being offered? What are the tax and other ramifications of leases vs. loans? What financial covenants and additional collateral should obligors be prepared to provide? What are the commonly negotiated financing terms and conditions? Will financing impact operating structures?
Option B: Can you Charge for Flights Under Part 91?
Kevin Austin, Aero Law Group; Glenn Hediger, Aviation Financial Consulting
This session will discuss the legal and regulatory issues of receiving compensation for flights under Part 91. Topics include: executives reimbursing the company for use of an aircraft; internal cost allocations; and cost sharing among multiple entities. Learn the permissible options under the FARs for an aircraft owner or operator to accept payment for use of their aircraft, as well as the FET ramifications for doing so. The focus will be on FAR 91.501 as it applies to aircraft operations under certain ownership structures.
- 2:40 p.m. – 3:40 p.m.
- Breakout Sessions
Option A: Matching State Tax Planning with Ownership Structures
Eli Mansour, Procopio, Cory, Hargreaves & Savitch; Jordan Miller, CenterPoint Aviation Law
In acquiring, owning and operating an aircraft, evaluating state tax issues is critical. Through the use of scenarios, this session will discuss ownership and operating structures designed to minimize state aircraft-related taxes and how to implement proven state tax planning strategies and utilize available NBAA resources during the process. Learn about emerging state tax issues such as scrutiny of leasing company structures and property taxes and what steps can be taken in advance to prepare for possible state tax audits.
Option B: Emerging Federal Tax Issues
John Hoover, Cooley LLP; Michala Irons, Barnes & Thornburg
Gain insights into the federal tax issues that NBAA is actively working on with the IRS, including FET on management companies and the leasing company trap under section 280F. The presentation will also discuss other issues relating to aircraft leased between related parties such as bonus depreciation, the 3.8% excise tax, and the passive loss rules relating to limited partners and limited entrepreneurs.
- 3:40 p.m. – 4:10 p.m.
- Afternoon Break
- 4:10 p.m. – 5:15 p.m.
- Will your Tax Planning Survive an Audit?
Cliff Maine, Barnes & Thornburg (moderator); Phil Crowther, Jackson & Wade; Steve Thorne, Deloitte
Apply concepts and scenarios from throughout the day to develop a plan that prepares for an IRS audit of business aircraft operations. The practical aspects of the audit, from the general audit process to guidelines for interacting with the auditor, will be discussed in detail along with the IRS appeals process and potential settlement programs that may be available to taxpayers. Finally, experts on the panel will discuss general audit “triggers” based on their own experiences.
- 5:15 p.m. – 5:30 p.m.
- Day 1 Review and Wrap Up
Day 2: Monday, October 20, 2014
- 8:15 a.m. – 8:30 a.m.
- Welcome and Overview of Day 2 Learning Objectives
- 8:30 a.m. – 9:00 a.m.
- Evaluate your Planning Through an Enterprise Risk Assessment
Deborah Bew Liu, Aircraft Acquisitions; Stephen Hofer, Aerlex Law Group
When an aircraft is first acquired, a buyer engages aviation regulatory and tax experts to plan for ownership and operations. Once the flight department is established, how is the same due diligence applied to future planning decisions? An effective solution is using flight department emergency response planning to ensure the exercise fits into the larger corporate strategy. An actual aircraft incident may bring regulators to the door, essentially auditing everything, including tax and regulatory planning decisions. Analyzing the long-term impact of risk with the right participants invites proactive dialogue on how the enterprise approaches legal, documentation, insurance, employee assistance, shareholder relation and other risk areas.
- 9:30 a.m. – 10:30 a.m.
- Introduction to Personal Use of Business Aircraft
Alan Burnett, CenterPoint Aviation Law
Prepare for the unique tax and recordkeeping challenges of personal use of company provided aircraft by understanding concepts such as the standard industry fare level (SIFL) rules, entertainment use disallowance and proper classification of passengers. Scenarios and sample calculations will provide practical examples of how the fringe benefit rules are applied. Also, learn how tracking aircraft personal use ties into the overall recordkeeping and audit preparation strategy.
- 10:30 a.m. – 11:00 a.m.
- Morning Break
- 11:00 a.m. – 12:00 noon
- Personal Use of Business Aircraft in the Real World
Jed Wolcott, Wolcott & Associates (moderator); Rick Farley, PwC; Sue Folkringa, Wolcott & Associates
Managing and tracking personal use of company aircraft is often filled with “gray areas” such as classifying a flight as personal vs. business or entertainment vs. non-entertainment. Using real world examples such as commuting flights, spouse travel and other scenarios, this session will develop strategies for applying the tax rules surrounding personal use to these gray areas. Also receive answers to common questions surrounding guest travel and reimbursement arrangements that are allowable under Part 91.
- 12:00 noon – 1:00 p.m.
- 1:00 p.m. – 2:00 p.m.
- Breakout Sessions
Option A: Evaluating Managed vs. In-House Flight Operations
Jeff Agur, VanAllen Group; Mark Dennen, Solairus Aviation
Should your flight operation be externally managed or in-house? Every situation is unique, and numerous operational, financial, tax, regulatory, legal, and service considerations should be weighed in considering the issue. Gain helpful insights into all of these issues from multiple perspectives, and learn about best practices for successfully managing a third-party relationship.
Option B: Emerging International Tax and Regulatory Issues
James Meyer, Harper Meyer (moderator); Grant Atchison, Moore Stephens; Ken Basch, Basch & Rameh; Laura Pierallini, Studio Pierallini; Lasse Rungholm, OPMAS
Operating a business aircraft internationally requires advance tax and regulatory planning to deal with issues ranging from value added tax (VAT) to the emissions trading scheme in the EU. Learn about multi-jurisdictional options for managing VAT and understand unique aircraft importation issues in the EU. Also, receive an update on emerging VAT and regulatory issues in Mexico, Brazil and elsewhere in Latin America.
- 2:15 p.m. – 3:15 p.m.
- Breakout Sessions
Option A: Developing an Aircraft Use Policy
Eileen Gleimer, Crowell & Moring
The development of a comprehensive aircraft use policy will help business aircraft operators better manage issues such as aircraft sharing and personal use. Apply practical tools to begin developing a policy or refine an existing policy that will bring discipline and transparency to flight operations. Finally, understand how a robust aircraft use policy fits into the broader context of enterprise risk assessment.
Option B: Fundamentals of Federal Excise Tax
Nel Stubbs, Conklin & de Decker
What is FET and how does it apply to Part 135 operations? What are the components of the tax? What does it apply to and how is it calculated? The main elements of FET- including the air transportation and fuel taxes will be discussed through the use of common tax scenarios. Further, as IRS FET audits of management companies continue, learn about recordkeeping strategies for dealing with a possible audit.
- 3:15 p.m. – 3:45 p.m.
- Afternoon Break
- 3:45 p.m. – 5:00 p.m.
- Plan, Document, Comply:
Succeeding in the Aircraft Transaction
Jeff Wieand, Boston JetSearch (moderator); Joanne Barbera, Barbera & Watkins; Alan Goldstein, Citi Corporate Aviation; Mark Ringel, Zuckert, Scoutt & Rasenberger
This session brings together the major tax and regulatory planning issues discussed throughout the conference. Learn from an aircraft acquisition advisor, in-house flight department CFO and experienced aviation attorneys about how to manage the complex process of acquiring and operating an aircraft. Elements of the aircraft acquisition process that are important for future internal and possible external tax audits will be highlighted. This session will be interactive and draw from attendee questions received during the conference.
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