The Treasury Department formally declined a request from a group of Senate Democrats to change the tax rules governing how employees value personal use of employer-provided aircraft, preserving the Standard Industry Fare Level (SIFL) valuation method.
In a letter dated August 17, 2026, Treasury’s Office of Legislative Affairs responded to an earlier July 24, 2026 letter from Senators Sheldon Whitehouse, Elizabeth Warren, Chris Van Hollen, Ed Markey, and Bernie Sanders, who had urged Treasury and the IRS to close what they characterized as a loophole allowing wealthy executives to substantially undervalue the taxable cost of personal travel on corporate jets. The senators referenced a Joint Committee on Taxation analysis showing that a flight between New York and Washington, D.C., with a fair market chartered value potentially exceeding $5,000, could be reported under the SIFL method at a value of roughly $236, producing a meaningful reduction in the executive’s imputed income and corresponding tax liability.
Under Treasury Regulation § 1.61-21, employees generally must include in gross income the value of personal use of employer-provided aircraft as a fringe benefit, treated as wages for employment tax and information reporting purposes. Employees may value that use either at the amount it would cost to charter a comparable aircraft in an arm’s length transaction, or under the SIFL method, which multiplies published cents-per-mile rates by an aircraft weight-based multiple and adds a terminal charge. The Department of Transportation calculates the underlying SIFL mileage rates and terminal charge, and the IRS publishes updated figures twice a year in a Revenue Ruling. For flights taken in the first half of 2026, for example, the terminal charge was $54.48, with mileage rates ranging from roughly 22 to 30 cents per mile depending on flight distance.
Treasury’s defended the SIFL method largely on administrative grounds, explaining that requiring individualized fair market value appraisals for every personal flight taken on employer-provided aircraft would impose a significant compliance burden on both taxpayers and the IRS. Treasury noted that the standardized method, finalized in 1989, was designed to produce consistent results across taxpayers and that the semi-annual rate updates were intended to keep pace with prevailing market conditions.
The exchange comes against the backdrop of the permanent extension of 100 percent bonus depreciation for aircraft purchases under recent tax legislation, which the senators argue compounds the benefit created by the SIFL valuation gap. Critics of the current rule, including Senator Whitehouse, argue that the SIFL rates have fallen far behind actual charter costs and that maintaining the status quo effectively shifts tax burden away from high-income executives and toward other taxpayers.
For businesses and executives that provide or use employer aircraft for personal travel, Treasury’s response indicates that the current SIFL valuation framework remains the standard. However, future rulemaking proceedings are worth monitoring given the sustained scrutiny this issue has received. For more information about this update, contact Liskow attorneys Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, and visit Liskow’s Tax Practice page.