OUR THOUGHTS ON:

IRS Releases SIFL Mileage Rates and Terminal Charges for Second Half of 2011

Tax

By Ron Kramer

On October 3, 2011, the Internal Revenue Service (IRS) released Rev. Rul. 2011-21 providing the applicable terminal charge and the Standard Industry Fare Level (SIFL) mileage rates that are in effect for the second half of 2011. The SIFL rates are used for determining the value of noncommercial flights on employer-provided aircraft for purposes of the taxation of fringe benefits. The SIFL cents-per-mile rates and the terminal charge are calculated by the Department of Transportation and are reviewed semi-annually.

Background

For purposes of the taxation of fringe benefits under Section 61 of the Internal Revenue Code, Section 1.61-21(g) of the Income Tax Regulations provides a rule for valuing personal noncommercial flights on employer-provided aircraft. Section 1.61-21(g)(5) provides an aircraft valuation formula to determine the value of such flights. The value of a flight is determined under the base aircraft valuation formula (also known as the Standard Industry Fare Level formula or SIFL) by multiplying the SIFL cents-per-mile rates applicable for the period during which the flight was taken by the appropriate aircraft multiple provided in Section 1.61-21(g)(7) and then adding the applicable terminal charge.

The following table sets forth the SIFL mileage rates and terminal charge for both periods of 2011:



If you have any questions regarding application of the SIFL rules, or on the tax rules as they relate to the use of business aircraft, please contact a Schneider Downs tax representative.

© 2011 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.
This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

comments