Are Your Lease Payments Still Deductible? The Confounding IRS Guidance Limiting the 'Entertainment' Use of Business Aircraft

In its zeal to eradicate perceived abuses and further clip the wings of executives who, based on press reports, took great pleasure in using the company's airplane for personal purposes, Congress amended section 274(e)(2) of the Internal Revenue Code (the "Code") in the American Jobs Creation Act of 2004 ("AJCA"). Effective on the date of enactment (Oct. 22, 2004), these amendments effectively reversed the decisions of the Tax Court and Eighth Circuit in <i>Sutherland Lumber-Southwest, Inc. v. Commissioner</i>, 114 T.C. 197 (2000), <i>aff'd</i> 255 F.3d 495 (8th Cir. 2001), <i>acq.</i> AOD 2002-02 (Feb. 11, 2002), and prompted the Internal Revenue Service ("IRS" or the "Service") to issue guidance containing a myriad of rule changes and hinting at others, leaving tax practitioners scratching their heads and companies running for cover.

26 minute readOctober 03, 2005 at 03:10 PM
By
Marianna G. Dyson, Michael M. Lloyd
Lee H. Spence
Are Your Lease Payments Still Deductible? The Confounding IRS Guidance Limiting the 'Entertainment' Use of Business Aircraft

In its zeal to eradicate perceived abuses and further clip the wings of executives who, based on press reports, took great pleasure in using the company's airplane for personal purposes, Congress amended section 274(e)(2) of the Internal Revenue Code (the “Code”) in the American Jobs Creation Act of 2004 (“AJCA”).

This premium content is locked for LawJournalNewsletters subscribers only

ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN LawJournalNewsletters

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts
Subscribe Now

Already have an account? Sign In Now

For enterprise-wide or corporate access, please contact Customer Service at [email protected] or call 1-877-256-2473.

NOT FOR REPRINT

© 2026 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Continue Reading

How Courts Interpret and Apply the Interplay Between the Bankruptcy Code and Medicare Program Act

The combination of increasing operating costs and uncertain government reimbursement funding continues to place health care providers under financial pressure, and in many cases, financial distress. Given the importance of Medicare/Medicaid funding of claims under provider agreements with the federal government, how courts interpret and apply the interplay between the Bankruptcy Code and Medicare Program Act determines the disposition of hundreds of millions of dollars of claims for reimbursement that support the health care system.

April 30, 2026

AI Transparency: Clear Explanations Matter More Than Disclosure

As AI becomes embedded in everyday business and legal operations, organizations are confronting a new expectation: simply disclosing AI use is no longer enough. A critical shift is taking place in the legal industry: transparency is no longer just about disclosure; it’s about comprehension.

April 30, 2026