DawgTalkers.net Forums DawgTalk Everything Else... NetJets, a unit of Warren Buffett's Berkshire Hathaway, is suing the IRS

The Wall Street Journal Link

NEW YORK—NetJets, a unit of Warren Buffett's Berkshire Hathaway Inc., this week sued the Internal Revenue Service over what it called an "illegal" $643 million tax assessment.

The IRS had determined that NetJets had failed to collect a "ticket tax" from its customers—the same tax that's paid by passengers every time they fly on a commercial flight.

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NetJets, a division of billionaire Warren Buffett's Berkshire Hathaway, failed to collect a 'ticket tax' from customers, the IRS claims.

But NetJets argued in the lawsuit, filed in a federal court in Ohio on Monday, that the tax was meant to be paid only by commercial or charter passengers. NetJets, in contrast, primarily sells or leases shares in planes to wealthy flyers. It calls its clients "owners" of a fraction of a plane.

"The IRS's assessments in this case improperly extend application of the ticket tax beyond commercial airline and charter passengers, to persons who own the aircraft on which they fly," the company said in the suit.

NetJets also claimed that the IRS hadn't attempted to assess such taxes on rival fractional-jet businesses, placing the company "at a significant disadvantage."

The IRS has assessed NetJets for the unpaid ticket tax on both the hours when the planes were in use, and also for management fees and fuel surcharges that NetJets collects from its customers, according to the suit.

An IRS representative said the agency can't comment on pending litigation.

The lawsuit was previously reported by Bloomberg News.

Tax collectors

It's a little late to bring it up anyway, it would be one thing if they had to start charging a ticket tax, but to go back in time is wrong. Hopefully the Judges will figure it out.

Going after back taxes is nothing new for the IRS. They do it all the time.

It will simply boil down to if the court see the clients as partial owners or simply passengers.

I think the IRS is reaching here. I don't think it beyond reason that a multi-million dollar item such as a jet could be owned by a group of people who share flight time.

Netjets has a pretty cool website.

web page

Wow, that is a pretty cool website..

So, if the people that fly on these private jets are owners, then anyone that flys thier own jet should be taxed also right? I mean, if it works like the IRS is saying for Netjets, then shouldn't it be that way for anyone that owns a jet?

Or plane of any type.


The sticking point is the IRS apparently doesn't consider these people as owners and wants them taxed a ticket tax.


In digging around the site, a persons smallest investment is a 1/16 share which entitles them to 50 hours of flight time per year.

It has to be more then $12000.....a $3000000 jet 16 ways is over $187,000 .



In reading a bit further you pay a monthly management fee....it sounds like that covers all the maintenance, fuel costs.


After your 5 year contract is up, you stop paying the 187K and just pay the monthly fee.

Be the way to go if you had the coin. No TSA goons to deal with.

If I spoke to my uncle, I'd call him and ask. He has a "deal" with this company. I'm sure he's following it.

My uncle is also a jackass that would sell me, you, any family member, or any other person - down the river, as long as he made money on it.
He's one of those "If I can make money screwing you, I'll do it." types of people. Good for him - he's got more money than a person could dream of having - but he has no friends unless he pays them.

Top rate jackass. Sold his family out for his money. (and I don't consider myself as one he sold out, although I probably should)

OK