Michael wrote:

If they were even a little bit right, how could organizations like
Angel Flight possibly operate?

Angel Flight and its cousins are special. See for example
http://www.aircareall.org/tax.htm where it quotes our old friend Rick Cremer
(who used to contribute to this newsgroup):

762019 S15/FAA Topics
23-Feb-95 11:17:31
Sb #ANGEL FLIGHT POLICY
Fm Rick Cremer FAA HQ 72130,3305
To ALL

FAA "ANGEL FLIGHT" POLICY

Recently, the FAA published Change 10 to it's Air Transportation Inspector's
handbook (FAA Order 8400.10). That change included new guidance for our
inspectors concerning Angel Flights. Included below, is the full text of
guidance. What it says, basically, is that if a person takes a charitable tax
deduction for the costs associated with the operation that does not constitute a
for hire or compensation operation.

Best Regards

Rick Cremer FAA HDQ



FAA Order 8400.10, Vol. 4, Chap. 5, Sect. 1, Para 1345 12/20/94

1345. FAA POLICY REGARDING "COMPENSATION OR HIRE" CONSIDERATIONS

FOR CHARITABLE FLIGHTS OR LIFE FLIGHTS. Various organizations and pilots are
conducting flights that are characterized as "volunteer," "charity," or
"humanitarian." These flights are referred to by numerous generic names,
including "lifeline flights," "life flights," "mercy flights," and "angel
flights." These types of flights will be referred to as "life flights" in this
section.

A. Purposes for Life Flights. The types of organizations and pilots involved
with or conducting life flights vary greatly. 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.

B. FAA Policy. The FAA's policy supports "truly humanitarian efforts" to provide
life flights to needy persons (including "compassionate flights"). This also
includes flights involving the transfer of blood and human organs. Since
Congress has specifically provided for the tax deductibility of some costs of
charitable acts, the FAA will not treat charitable deductions of such costs,
standing alone, as constituting "compensation or hire" for the purpose of
enforcement of FAR 61.118 or FAR Part 135. Inspectors should not treat the tax
deductibility of costs as constituting "compensation or hire" when the flights
are conducted for humanitarian purposes.