FAA Authorization Failure = Cheaper Airline Tickets

Once again, the government's lack of ability to get something accomplished by a deadline is impacting the tax payer.

Lawmakers failed to reach a deal to extend the operating authority of the Federal Aviation Authority, meaning flights at airports will be temporarily cheaper starting today!  The dispute means a savings on the tax portion of your air fare, but the temporary shutdown means putting 4,000 people temporarily out of work and the suspension of the collection of federal airline ticket sales.

According to the Las Vegas review, "Obama administration officials have said the shutdown will not affect air safety.  Air traffic controllers will remain on the job.  But airlines will lose the authority to collect about $200 million a week in ticket taxes that go into a trust fund that pays for FAA programs."

It is amazing that at a time when lawmakers are considering tax increases that they would allow a sales tax to expire causing a temporary stoppage in the collection of the tax.  Another way to view this lack of responsibility, consider you are a working parent and you have to pass a drug test at work before you can start to earn your 10% commission on everything you sell.

You are already selling the goods and services, but you just have to pass the test in order to earn the commission.  Meanwhile, you and your family continue to put money on the family credit card because you refuse to take the drug test.

SARCASM METER: Thank you lawmakers for leading by example.

The IRS issued the following statement:

"The IRS continues to monitor pending legislation related to this issue.  The IRS will continue to work with the airline industry to address issues relating to the collection and payment of the taxes involved.  Taxpayers do not need to take any action at this time.  The IRS will provide further guidance on this issue in the near future."

Although, the IRS hasn't indicated if you buy tickets now, but fly later, if you will be responsible for the additional taxes.  But, if you plan on flying soon, my advice is to book your flights and roll the dice on the taxes!

Happy traveling!

David Rocci

Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.

Posted To: Tax Rants by David Rocci By: David Rocci On: Tuesday, July 26, 2011
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