Monday, October 3, 2011
Rev. Rul. 2011-21, 2011-40 IRB 458, 09/30/2011, IRC Sec(s).
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 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 SIFL cents-per-mile rates in the formula and the terminal charge are calculated by the Department of Transportation and are reviewed semi-annually.
The following chart sets forth the terminal charge and SIFL mileage rates:
Period During Which the Flight Is Taken Terminal Charge SIFL Mileage Rates
Up to 500 miles = $.2395 per mile
501-1500 miles = $.1826 per mile
Over 1500 miles = $.1756 per mile
The principal author of this revenue ruling is Kathleen Edmondson of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt/Government Entities). For further information regarding this revenue ruling, contact Ms. Edmondson at (202) 622-0047 (not a toll-free call).