Fringe benefits aircraft valuation formula. The
Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charge
in effect for the second half of 2006 are set forth for purposes of determining
the value of noncommercial flights on employer-provided aircraft under section
1.61-21(g) of the regulations.
For purposes of the taxation of fringe benefits under section 61 of
the Internal Revenue Code, section 1.61-21(g) of the Income Tax Regulations
provides a rule for valuing noncommercial flights on employer-provided aircraft.
Section 1.61-21(g)(5) provides an aircraft valuation formula to determine
the value of such flights. The value of a flight is determined under the
base aircraft valuation formula (also known as the Standard Industry Fare
Level formula or SIFL) by multiplying the SIFL cents-per-mile rates applicable
for the period during which the flight was taken by the appropriate aircraft
multiple provided in section 1.61-21(g)(7) and then adding the applicable
terminal charge. The SIFL cents-per-mile rates in the formula and the terminal
charge are calculated by the Department of Transportation and are reviewed
The following chart sets forth the terminal charges and SIFL mileage
|Period During Which the Flight Is Taken
||SIFL Mileage Rates
|7/1/06 - 12/31/06
||Up to 500 miles = $.2071 per mile
||501-1500 miles = $.1579 per mile
||Over 1500 miles = $.1518 per mile
The principal author of this revenue ruling is Kathleen Edmondson of
the Office of Division Counsel/Associate Chief Counsel (Tax Exempt/Government
Entities). For further information regarding this revenue ruling, contact
Ms. Edmondson at (202) 622-0047 (not a toll-free call).
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