Elon Musk has set out to provide tours of space to anyone that can afford to buy a ticket. The first voyage for his company, SpaceX, is set to travel 800,000 km around the moon in 2023.
Unfortunately, government authorities may have grounded Mr. Musk’s first potential client.
How is the government holding back a potential trip to space?
According to a recent report, criminal charges may hold back Musk’s first potential client, Japanese billionaire Yusaku Maezawa. Japanese tax authorities have accused Mr. Maezawa of evading tax obligations. He has allegedly failed to properly account for private use of a corporate jet. As a result, tax authorities claim the entrepreneur failed to pay taxes on over 4.6 million over a span of three years.
Could the same hold true in the United States?
Although these allegations are specific to Japanese law, similar allegations can exist in the United States. The United States tax code generally allows businesses to deduct certain aircraft expenses when the airplane is used for business purposes. These expenses can include the cost of maintenance, hanger fees, fuel and depreciation. However, the Internal Revenue Service (IRS) is unlikely to allow for such deductions when the aircraft is used for personal travel.
As a result, it is important to keep records to support deductions claimed for the use of these aircrafts. Similar to Mr. Maezawa’s case, those who fail to have such document and make a claim for such travel as a business deduction on tax filings in the U.S. could find it difficult to defend against allegations of tax evasion.