Plane Rental, Insurance Valid Business Expenses, Tax Court Told

Aircraft rental and insurance were proper business expenses that shouldn’t subject a beverage company to tax penalties, owners told the US Tax Court.

Carmine and Marybeth DeCrescente of New York petitioned the US Tax Court contesting claimed IRS deficiencies from their 2018 to 2021 tax years. The IRS had assessed more than $4.35 million in tax liabilities for those two years for their beverage company’s microcaptive insurance and rental of aircraft.

In the petition, the DeCrescentes said, the IRS determined the transactions in question lacked proof of economic substance related to their business, DeCrescente Distributing Company Inc., and that because ...