Internal Revenue Service
Revenue Ruling

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Rev. Rul. 2002-56, 2002-37 I.R.B. 526

Internal Revenue Service (I.R.S.)

Revenue Ruling

FRINGE BENEFITS AIRCRAFT VALUATION FORMULA

Published: September 16, 2002

Section 61.--Gross Income Defined, 26 CFR 1.61-21: Taxation of fringe benefits.

  Fringe benefits aircraft valuation formula. The Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charges in effect for the second half of 2002 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.

  Fringe benefits aircraft valuation formula. For purposes of section 1.61-21(g) of the Income Tax Regulations, relating to the rule for valuing non- commercial flights on employer-provided aircraft, the Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charge in effect for the second half of 2002 are set forth.

  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 semi-annually.

  The following chart sets forth the terminal charges and SIFL mileage rates:

  -------------------------------------------------------------------------------
Period During Which the        Terminal       SIFL Mileage Rates                
  Flight Is Taken                Charge                                        
                                                                                
7/1/02 - 12/31/02              $38.02         Up to 500 miles = $.2080 per mile
                                                                                
                                              501-1500 miles = $.1586 per mile  
                                                                                
                                              Over 1500 miles = $.1524 per mile
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Drafting Information
  The principal author of this revenue ruling is Kathleen Edmondson of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding this revenue ruling, contact Ms. Edmondson at (202) 622-6040 (not a toll-free call).

Rev. Rul. 2002-56, 2002-37 I.R.B. 526