Now that PNP is a 501c3, and people like me are starting to think about taking a tax deduction on their transport related expenses, I wanted to get clarification on one critical issue. Does taking a tax deduction on a flight constitute "compensation" under the FARs? There was a case back in the 1992 (Administrator v. Carter) that gets cited an awful lot in relation to this. Apparently, a private pilot flew a couple of speakers to a conference for a charity, and took the tax deduction. The FAA initiated an enforcement action for two reasons: 1) the flight failed the "common purpose" test, and 2) they construed the tax deduction as compensation.
Since, the issue has been clarified some what. The Air Care Alliance (the Angel Flight folks) has some good info on the topic: http://www.aircareall.org/tax.htm
. But this clarification leaves open a question for PNP flights. To summarize:
1. "The FAA's policy supports "truly humanitarian efforts" to provide life flights to needy persons (including "compassionate flights"). ... The FAA will not treat charitable deductions of such costs, standing alone, as constituting "compensation or hire" for the purpose of enforcement of [the FARs]" That is, the FAA still thinks that deductions are compensation, but they are not going to enforce that rule where "humanitarian efforts" are involved. (So far so good...)
2. BUT the above specifically limits such deductions to "truly humanitarian efforts". AND the FAA provides examples of "truly humanitarian efforts" as "The most common purpose of life flights is to transport ill or injured persons who cannot financially afford commercial transport to appropriate medical treatment facilities, or to transport blood or human organs. Other "compassionate flights" include transporting a child to visit with a dying relative, or transporting a dying patient to return to the city of the patient's birth."
3. And they reiterated this in 2007 saying "By longstanding enforcement policy, the FAA has allowed aircraft operators who take a charitable tax deduction to transport a sick or injured person without that operator having an air carrier certificate."
Okay, so the question is this: Do PNP flights constitute "truly humanitarian efforts" under the FAA definition? If the examples they give are any indication, they seem to have a rather narrow view of what is "truly humanitarian." (For example, they don't even include material transport for disaster relief.) They seem to limit the scope to those flights benefiting sick or injured persons. If PNP flights are considered "truly humanitarian" by the FAA, then taking a tax deduction should not be a problem. If the animals are simply considered "cargo" then taking a tax deduction may be construed as "compensation," and any pilot/plane not properly certificated may end up in the cross hairs of a zealous FAA inspector.
Is this something we should seek clarification about from an FSDO?