IRS Countersues NetJets, Seeking $367M in Excise Taxes

The IRS has countersued NetJets for more than $360 million in alleged uncollected excise taxes. In November, NetJets sued the federal government for what it said were wrongfully imposed taxes, interest and penalties totaling more than $642.7 million. NetJets claimed that as a manager of private aircraft, it was not required to pay a “ticket tax” because its services were not taxable transportation. Less than six months later, the IRS filed the countersuit, refuting NetJets’ claim and asserting that four NetJets business units “failed, neglected or refused” to pay excise taxes and related penalties between 2003 and 2009 in the amount of approximately $367 million. The countersuit claims NetJets Aviation owes $302.1 million, NetJets International owes $53 million, Executive Jet Management owes $10 million and NetJets Large Aircraft owes $1.91 million. In 2011, NetJets posted a pre-tax profit of $227 million. In a statement released to the media, NetJets general counsel Colleen Nissi said, “NetJets doesn’t comment on pending legislation.”

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