Congress Retroactively Reinstates Airline Excise Tax Then Provides Relief For Retroactively Reinstated Tax

This week Congress extended the Federal Aviation Administration's authority to collect federal passenger air transportation excise taxes ("ticket taxes'). On the brink of a possible government shutdown, the FAA budget authority expired on July 22, 2011. Airline tickets purchased between July 23 and August 5 were not assessed the ticket tax. The Congressional action retroactively reinstated the tax. However, the IRS is providing relief to purchasers of tickets and will not attempt to collect any unpaid taxes from the purchasers or the airlines.

Even the IRS recognizes that assessing and collecting taxes retroactively is foolish and nearly impossible to enforce.