Flying for compensation vs. gift.

[JGoodish]

Don't be surprised if you don't get an answer. The Chief Counsel gets inundated with request for regulation "clarification" and unless this is seen as a problematic regulation they will not take the time to answer.

You might be right. I've written once, maybe twice, and received responses both times, although my questions were about IFR operations. My guess is that they wouldn't appreciate having to spend time responding to this one.


JKG

 

[Everskyward]

Go out and fly. Quit worrying about this crap so much.

+1...

 

[poadeleted20]

Y'all really need to chill the heck out about this regulation.
Look through the NTSB case law, see how many cases there are against Private Pilots for violating this reg.

Yup....

If a tree falls in an empty forest, can the FAA hear the duck quacking?

Go out and fly. Quit worrying about this crap so much.

Just don't leave a paper trail.

Finally, if you can't stand the answer, don't ask a regulatory question. If you do ask the question, don't complain here if the answer isn't one you like. If you really don't like the answer, don't rant at the person explaining the rule -- go read 14 CFR Part 11 and submit a petition to change the rule.

 

[Ted]

Y'all really need to chill the heck out about this regulation.
Look through the NTSB case law, see how many cases there are against Private Pilots for violating this reg.

Yup....

Go out and fly. Quit worrying about this crap so much.

The best advice in this thread. Thank you for the sanity check.

 

[raider]

He was joking.

I tried to make it crazy enough not to add the explanatory smiley

 

[Capt. Geoffrey Thorpe]

I tried to make it crazy enough not to add the explanatory smiley

You could post about chemtrails, the moon landing hoax, or NASA's UFO base on the Artic continent and someone would think you are being serious. Someone might even agree.

If you want proof of the NASA UFO coverup - just look at any map. The coverup goes so deep that even maps showing existance of a continent at the north pole has been suppressed.

 

[gismo]

You cannot be reimbursed for your own share no matter what (unless, of course, you're a CP/ATP acting as the company pilot).

Was that true before the "mangled" CC opinion? I would think this would have fit into the "incidental" exception prior to that even when no "common purpose" existed.

I know of no reason you can't claim this unreimbursed business expense on your personal income taxes.

Not deliberately disagreeing, but it seems you're saying it's OK to be "reimbursed" by the government but not by your company.

And while we're (sort of) on the subject, I'm still amazed (and frustrated) that the FAA allows renters to be reimbursed for the full cost of business flights but airplane owners are restricted to "direct costs" i.e. fuel, oil, and fees paid for the flight. I can see how the ability to apportion indirect costs like insurance, hangar, maintenance, etc. could be abused but it seems like there ought to be some allowance for properly documented indirect costs.

 

[poadeleted20]

Was that true before the "mangled" CC opinion?

Everyone thought so all along, but since the Chief Counsel said otherwise, everyone was wrong all along. Don't it make you want to strangle Mangiamele for asking the question? But for that, Flight Standards wouldn't ever have bothered anyone about it, since they didn't seem to think there was anything wrong with it.

Not deliberately disagreeing, but it seems you're saying it's OK to be "reimbursed" by the government but not by your company.

Actually, I think it was the FAA Chief Counsel who said tax deductions are not compensation, in an interpretation some time ago.

 

[denverpilot]

Everyone thought so all along, but since the Chief Counsel said otherwise, everyone was wrong all along.

That assumes the Chief Counsel is all-knowing, and I'm not buying that.

It also proves that Flight Standards has no balls. If they didn't mean it the way the Chief Counsel then they should re-wrote it and throw it back in the Omnicient face of said Honorable Counsel.

The problem I have with this is the Chief Counsel wields a lot of power with no direct accountability link to the taxpayers. It's not like voting for the District Attorney.

No closed loop to the people who pay their salary. We pay for bad work. If "everyone" knew the opinion was wrong, "everyone" should be fixing it.

 

[denverpilot]

Good lord those sentences are messed up. No "edit" option from Tapatalk. Sigh. You get the idea.

 

[gismo]

Actually, I think it was the FAA Chief Counsel who said tax deductions are not compensation, in an interpretation some time ago.

I am curious to read such an interp but obviously it would be a bad idea to query the FAA about this today.

 

[poadeleted20]

That assumes the Chief Counsel is all-knowing, and I'm not buying that.

Then you need to read Administrator v. NTSB and Merrell, 190 F.3d 571 (D.C. Cir. 1999).
http://openjurist.org/190/f3d/571/j...tion-v-national-transportation-safety-board-a
The interpretations of the FAA's own regulations by Administrator (a task delegated to the Chief Counsel) are binding as long as they are not "arbitrary, capricious, or otherwise not according to law," and that is extremely tough to prove to the US Court of Appeals.

It also proves that Flight Standards has no balls. If they didn't mean it the way the Chief Counsel then they should re-wrote it and throw it back in the Omnicient face of said Honorable Counsel.

It's not as easy as you make it sound. Regulation changes take years.

 

[poadeleted20]

I am curious to read such an interp but obviously it would be a bad idea to query the FAA about this today.

http://www.faa.gov/about/office_org...erpretations/data/interps/2009/Silverberg.pdf
http://www.faa.gov/about/office_org.../interpretations/data/interps/2005/Kirwan.rtf

"Since Congress has specifically provided for the tax deductibility of some costs of charitable acts, the FAA will not treat charitable deduction of such costs, standing alone, as constituting "compensation or hire" for the purpose of enforcing [the Federal Aviation Regulations]." If taking a charitable tax deduction for transporting persons or property is coupled with any reimbursement of expenses, or other compensation of any kind, then this policy does not apply. See FAA Order 8400.10, Vol. 4, Chap. 5, § 1, ¶ 1345 (1994).

Not precisely on point, as that covers charity flights, but Congress also provided for the tax deductibility of unreimbursed business expenses.

 

[ChrisK]

I hate to jump in so late on this thread to ask a question about something I read on page one, but..

My partner and I each own 50% of our small business, of which we are the only two employees, and from which we derive 100% of our income. What I just read states that, as a non-commercial pilot, I can fly my partner and I to a business engagement, and he can file for reimbursement from his employer (which happens to be owned by the two of us) for 50% of the cost of our trip and then give me that amount.

The fact that we own the S-Corp that is providing the reimbursement makes this smell scheemy.

Edit - and what I'm reading above means I can actually write off the 50% that I don't get reimbursed. Since I own the company, there is not much difference to me between a writeoff (subject to limits) and reimbursement.

 

[midlifeflyer]

Everyone thought so all along, but since the Chief Counsel said otherwise, everyone was wrong all along. Don't it make you want to strangle Mangiamele for asking the question? But for that, Flight Standards wouldn't ever have bothered anyone about it, since they didn't seem to think there was anything wrong with it.

Actually, I think it was the FAA Chief Counsel who said tax deductions are not compensation, in an interpretation some time ago.

Actually the FAA Chief Counsel said in the first Angel Flight opinion that the tax deduction was compensation and Angel Flight needed a Part 135 certificate. Fortunately, the opinion was requested by Senator Phil Gramm who didn't much like it. The Chief Counsel reversed itself, but only for policy, not legal reasons.

==============================
"As a matter of policy, taking into consideration the fact that Congress
has specifically provided for the tax deductibility of some costs of
charitable acts, we will not treat charitable deduction of such costs,
standing alone, as constituting "compensation or hire" for the
purpose of enforcing [Paragraph] 61.118 or Part 135. If taking a charitable
tax deduction for transporting persons or property is coupled
with any reimbursement of expenses, or other compensation of any kind, then
this policy does not apply."
==============================

AFAIK, as recently as 2009's Silverberg letter, the charitable deduction not being treated as compensation has been applied only to charitable flights. I would hesitate expanding it beyond the charitable situation without guidance.

 

[cleared4theoption]

This thread makes my brain hurt

 

[Palmpilot]

If you want proof of the NASA UFO coverup - just look at any map. The coverup goes so deep that even maps showing existance of a continent at the north pole has been suppressed.

Circular reasoning knows no bounds!

 

[onwards]

OK, so here is my uneducated opinion:

If you don't fly commercially without the commercial ticket, no one will ever come after you.

I think that at the end of the day, we all have a good sense of what "flying commercially" means, which in broad strokes follows the concept of "flying strangers or cargo for money". Yes, some people will always push the limits, and try to do things they are not supposed to by looking for loopholes, but in the end, unless you're one of them, I wouldn't worry.

The FAA has better things to do then to try looking for you after you take a close friend on the plane to the next state for a wake and they end up slipping you a couple benjies in gratitude. You're simply not that important in the grand scheme of things.

 

[denverpilot]

It's not as easy as you make it sound. Regulation changes take years.

Not my fault they're slow. Only takes the Chief Council five minutes and clicking Save on a letter in Word. Guess they'd better step up their game. They're being whipped by a lawyer with a word processor.

 

[poadeleted20]

Not my fault they're slow. Only takes the Chief Council five minutes and clicking Save on a letter in Word.

Actually, it takes about 4 months for the Chief Counsel's office to produce an interpretation.

 

[denverpilot]

Actually, it takes about 4 months for the Chief Counsel's office to produce an interpretation.

I think you're missing the point.

(Still destroying the intent of the actual rule writers faster than they can or want to fix it.)

 

[jnmeade]

Then you need to read Administrator v. NTSB and Merrell, 190 F.3d 571 (D.C. Cir. 1999).
http://openjurist.org/190/f3d/571/j...tion-v-national-transportation-safety-board-a
The interpretations of the FAA's own regulations by Administrator (a task delegated to the Chief Counsel) are binding as long as they are not "arbitrary, capricious, or otherwise not according to law," and that is extremely tough to prove to the US Court of Appeals.

It's not as easy as you make it sound. Regulation changes take years.

SCOTUS wrote a recent opinion that holds regulatory agencies to some standards in this regard. Here's a quote from an online source of unknown credibility, but one can find the same discussion in several other places.

"regulation, evenwhen that interpretation is advanced in a legal brief, . . . this general rule does not apply in all cases. Deference is undoubtedly inappropriate, for example, when the agency’s interpretation is “‘plainly erroneous or inconsistent with the regulation.’” . . . And deference is likewise unwarranted when there is reason to suspect that the agency’s interpretation “does not reflectthe agency’s fair and considered judgment on the matter in question.” . . . This might occur when the agency’s interpretation conflicts with a prior interpretation, . . . or when it appears that theinterpretation is nothing more than a “convenient litigating position,” . . . or a “ ‘post hoc rationalizatio[n]’advanced by an agency seeking to defend past agency action against attack.”

In this case, there are strong reasons for withholding the deference that Auer generally requires. Petitioners invoke the DOL’s interpretation of ambiguous regulations to impose potentially massive liability on respondent for conduct that occurred well before that interpretation wasannounced. To defer to the agency’s interpretation in thiscircumstance would seriously undermine the principlethat agencies should provide regulated parties “fair warning of the conduct [a regulation] prohibits or requires.” . . . Indeed, it would result in precisely the kind of “unfair surprise” against which our cases have long warned. . . ."

 

[poadeleted20]

That's a nice case for arguing against the part of Merrell which says the Administrator may advance an interpretation for the first time during an enforcement proceeding. However, it does not provide much basis for arguing against Mangiamele in this context, since Mangiamele does not conflict with any previously published Chief Counsel interpretations, and has not been invoked over actions which occurred prior to its publication.