Treasury Refuses to Reform Private Jet SIFL Tax Formula, Citing Administrative Burden

The U.S. Treasury Department told five Senate Democrats on September 3 that it will not close a tax provision allowing employees who use their employer's private jet for personal travel to report only a fraction of the flight's actual cost as taxable income. The provision centers on the Standard Industry Fare Level (SIFL) formula, which the Internal Revenue Service uses under Treasury Regulation Section 1.61-21(g) as a safe harbor for valuing personal use of company aircraft. SIFL rates, updated twice a year by the Department of Transportation, run between 18 cents and 25 cents per mile, compared with the $8 to $23 per mile the senators said chartering a comparable jet typically costs.

For a flight between John F. Kennedy International Airport and Ronald Reagan Washington National Airport, the senators said fair market value can range from $4,500 to $5,112, while the SIFL method values the same flight at $235.77 — a gap that can save a flier $1,577 to $1,804 in taxes on a single trip. Senators Sheldon Whitehouse of Rhode Island, Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland, Ed Markey of Massachusetts, and Bernie Sanders of Vermont sent Treasury a letter dated July 24 requesting that the SIFL formula be updated to reflect actual market flight costs rather than decades-old fare assumptions. Treasury's September 3 response said calculating true market value for each flight would be administratively burdensome for both taxpayers and the IRS, and it did not include a timeline for revisiting the formula.

Whitehouse said "President Trump's 2017 tax law and Big, Beautiful-for-Billionaires bill handed billionaires and big corporations massive tax breaks on private jets," adding that the administration's refusal to act showed it was "hell-bent on using the powers of government to make the ultra-rich even richer." Van Hollen said the administration's priorities "revolve around enriching himself and his billionaire friends," while working families struggle to afford groceries, housing, and gas. The senators' letter followed a separate congressional inquiry into bonus depreciation rules for private aircraft, which allow buyers to write off the full purchase cost of a new jet in the year of purchase, and came after the IRS opened a corporate aircraft audit initiative in 2024 to examine whether companies were properly separating personal from business flight use — an initiative that did not change how the SIFL formula values personal flights.

This is one more round in a broader effort by lawmakers to narrow the tax treatment of corporate and private aircraft, following separate scrutiny of bonus depreciation and the IRS's 2024 audit initiative on personal-versus-business flight allocation. Each has targeted a different mechanism, but all point at the same underlying question: whether the value assigned to private aviation for tax purposes tracks its real market cost.

The SIFL formula illustrates how a valuation method built for administrative convenience can diverge sharply from the market it was meant to approximate — a fixed per-mile rate set by regulators twice a year, applied to an asset whose charter cost fluctuates with aircraft type, route, and demand. Treasury's stated rationale, that calculating true market value flight-by-flight would burden both taxpayers and the IRS, keeps that gap in place for as long as SIFL remains the accepted safe harbor.

With no timeline attached to Treasury's response, the next marker will be whether the senators escalate through legislation rather than correspondence, or whether the IRS's ongoing audit initiative eventually intersects with how personal-use flights are valued rather than just how they are categorized.