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By Kent S. Jackson

By Kent S. Jackson
Illegal Charters Can Pose Problems For All Involved 

The FAA is revising Advisory Circular AC 91-37A, Truth in Leasing, dated Jan. 16, 1978. Why? The regulation that the AC explains, FAR Part 91.23, has not changed.

Pilots Should Know When It Is OK To Drink A Beer 8
To comply with the FAA’s “prospective rest” requirement, the FAR Part 135 on-demand charter industry needs to adopt and accept some common-sense standards. First, a pilot who isn’t accustomed to flying “on the backside of the clock” (between midnight and sunrise) shouldn’t start without easing into it first. Second, a pilot has to know when it is OK to drink a beer.
FAA Enforcement Policy Could Improve Relationship with Operators
The FAA’s new Compliance Philosophy does not contain the phrase “promote and foster aviation.” There are, of course, a few troubling aspects, particularly the accepted belief that “policy” has the force and effect of regulation. But if the FAA succeeds in implementing this philosophy, the sometimes-strained relationship between agency and operators will improve, and safety will continue to improve.
Personal Use of Corporate Aircraft 

As explained in the adjacent feature article, Congress has ``overturned'' the Sutherland Lumber court decision that protected corporate deductions in spite of the fact that executives did not pay the full cost of the flight. It will be some time before the IRS offers any guidance on the many questions raised by the new law. Nevertheless, the new law became immediately effective on Oct. 22, 2004, so companies need strategies now.

New Rules for Fractionals and 135 

Nearly four years after creating the Fractional Ownership Advisory Rulemaking Committee (FOARC), the FAA has published final rules that define and regulate fractional ownership under new Subpart K of FAR Part 91. Additionally, the agency has published major changes to FAR Part 135 that also stemmed from the recommendations of the committee. One of the most important aspects of the new rules is publication of the definition of ``fractional ownership program,'' a phrase that has been embraced by providers of a variety of services over the years.

Got Insurance Coverage? Maybe Not. 

As a general rule, the courts have not been kind to insurance companies that try to deny coverage following an accident. Because the language of the policies is non-negotiable, the courts usually construe any ambiguity against the in-surance company and in favor of the insured. But not always.

Pilot Records 

They're not as comprehensive as a major-leaguer's stats, but the wins and losses of a pilot's career are on the books and get passed around -- that's the law. The Pilot Records Improvement Act (PRIA) of 1996 is the tattletale engine of aviation. It targets airline pilots, but can affect every professional aviator and those who employ them.

Background Checks 

Strange times bring strange ques-tions. Can we keep guns in the

cockpit? Can we wear holsters? No one has asked about adding hard points to the wings, but those with the inclination to do so probably don't ask for legal opinions.

Jury-Rigging Aviation 

On August 14, 1989, James Cassoutt was flying a Cessna 185 with his wife, Cindy, and Judy Kealey Diaz. According to the NTSB, he made a normal approach to Runway 36 at Myrtle Grove, Fla. He fully extended the flaps and applied full nose-up trim per the owner's handbook. The wind was from the east at three to eight knots. Thick scrub trees bordered the east side of the runway. A three-point landing was planned and touchdown occurred on the tail and right main wheel. The right wing came up as the left wheel touched and Cassoutt initiated a balked landing.

New Rules for 

A formal proposal involving changes in operating rules for fractional aircraft ownership programs and on-demand charter operators is on the street. The new rules are significant. The issues involved are contentious. And the FAA wants feedback.

Money Back Not Guaranteed 

The Equal Access to Justice Act (EAJA) was designed to help citizens defend themselves from unjustified governmental actions. In the context of a fight with the FAA, a pilot or mechanic who seeks to recover attorney's fees will only be paid if he or she (1) prevailed in the underlying proceeding, (2) meets certain net worth requirements and (3) incurred the sought fees and expenses in connection with the underlying proceeding.

Corporate Shields 

In the minds of attorneys, aircraft represent potentially catastrophic civil liability. And when presented with any kind of potentially devastating liability, an attorney's instinctive response is to create a separate corporation to ``shield'' the rest of the corporate family, and the individual assets of those who direct it.

Deduct Now, or Over Time? 

When a corporation has maintenance done on an airframe, including a ``heavy maintenance visit,'' are the bills deductible immediately as ordinary and necessary business expenses, or must the cost be ``capitalized'' (depreciated over time)?

Business aviation exists to serve at a moment's notice, so it is natural that flight departments want to deduct the full cost of all maintenance immediately. A recent IRS Revenue Ruling explains the factors that it reviews in determining whether an overhaul cost may be expensed, depreciated, or a combination of the two.

Criminalization of FAR Violations 

It is a simple question of social policy: If a pilot or mechanic makes a mistake that results in an accident, is it better to find out the truth of what happened and why, or is it more important to inflict criminal consequences on those at fault?

The Ordinary and Necessary Jet 

The ability to write off the purchase price of a corporate aircraft over the course of five and a half years, while the actual value of the aircraft may in fact increase, is a vital tax incentive that helps the industry immensely. However, the IRS occasionally takes a suspicious view of aircraft depreciation deductions.

One of the most important tax decisions on aircraft depreciation involved Robert Noyce, one of the cofounders of Intel.

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