Good morning. The Internal Revenue Service will begin auditing dozens of companies over the personal use of corporate jets by executives and other wealthy travelers. Millions of dollars of tax deductions are at stake.

• How: The agency will start with three to four dozen audits of large corporations and partnerships, and audits of high-income individuals likely will follow, IRS Commissioner Danny Werfel said Wednesday.
   
• Why? “These aircraft audits will help ensure that high-income groups aren’t flying under the radar,” Werfel said. “What we believe is happening is there’s not enough robust record-keeping going on, and there is systemic overstating of these business deductions.”
   
• The context: The audits are part of a larger IRS effort to step up enforcement with a focus on the nation’s wealthiest taxpayers, using new funding from the Inflation Reduction Act. Dozens of IRS workers are working on collection cases against high-income, high-wealth individuals who either haven’t filed their taxes or failed to pay what they owe. The IRS also has ramped up audits on large partnerships.
   
• Tax credit: Companies typically get a tax deduction for the cost of aircraft and flights used for business purposes. Some also allow top executives to take personal trips on the plane, often at company expense, typically citing safety and efficiency benefits.

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China quant fund suspended as regulators tighten grip on trading.

China’s two major stock exchanges have slapped a three-day ban on a large quantitative fund, the latest move by regulators ramping up trading scrutiny as they look to boost a sluggish market.

The quant hedge fund, Ningbo Lingjun Investment Management Partnership, has been barred from trading in the Shenzhen and the Shanghai stock exchanges, according to a statement issued by the two index operators late Tuesday.

The U.K.’s Financial Conduct Authority has ended a probe into Barclays’ anti-money-laundering controls, the bank said.

Barclays said in its annual report filed on Tuesday that the U.K. financial regulator had been investigating the bank’s compliance with U.K. money-laundering regulations and its transaction monitoring and that the FCA had informed the bank that it had closed the enforcement investigation into the matter.

The Financial Times, citing people familiar with the matter, reported in February 2023 that Barclays was being investigated by the FCA for issues with its compliance and AML systems.

—David Smagalla

• Former Honduran President Juan Orlando Hernández was once the toast of Washington as a key ally in the war on drugs. On Wednesday, he went on trial in New York on allegations of helping move more than 500 tons of cocaine through his country.
   
• Disgraced cryptocurrency entrepreneur Do Kwon should be extradited to the U.S. to face trial on fraud charges, rather than to his native South Korea, a court in the tiny Balkan country of Montenegro has ruled.

U.S. says some Israeli claims on U.N. staff solid, others not.

A new U.S. intelligence assessment found it is likely that some employees of a United Nations agency that distributes aid to Palestinians took part in Hamas’s Oct. 7 assault on Israel, but says the U.S. can’t verify Israeli allegations that a larger number of U.N. workers have links to militant groups, people familiar with the report said.

Washington and other Western capitals last month suspended funding for the United Nations Relief and Works Agency, which supplies aid to Palestinians, after Israel shared findings that at least 12 Unrwa employees were connected to the series of Hamas killings and kidnappings during an attack on Israel that sparked the war in Gaza.

Meanwhile, Israel’s top military lawyer said Wednesday that troops fighting in Gaza were under investigation for criminal offenses and other misconduct, including destruction of property, looting, abuse of prisoners and excessive use of force.

• Vital Aid Fails to Reach Gazans as Security Void Grows

China-Taiwan frictions flare after deaths of fishermen.

The deaths of two Chinese fishermen after a pursuit by Taiwan’s coast guard has set off a series of testy maritime encounters between Beijing and Taipei, heightening tensions along the Taiwan Strait, where Western officials and analysts have warned about the potential for armed conflict.

Beijing says it is stepping up law enforcement around Kinmen, a Taiwan-controlled archipelago that sits 3 miles from the Chinese mainland and more than 100 miles from Taiwan’s main island. This week, Chinese coast guard officials boarded a Taiwanese sightseeing boat near Kinmen, prompting complaints from Taiwanese officials.

Ukraine’s military spy chief says Russia will struggle to keep up the fight.

Russia’s capture of the east Ukrainian city of Avdiivka is the clearest sign yet of a shift in the war’s momentum as it approaches its third year.

In an interview Thursday, with Ukraine’s withdrawal already under way, Lt. Gen. Kyrylo Budanov, Ukraine’s military-intelligence chief, acknowledged the tough situation for Ukraine’s outnumbered and outgunned forces. But Russia also has problems, he said.

• Ukraine Aid Stuck in Congress, Supporters Push Fallback Plans

• The Biden administration plans to invest billions in the domestic manufacturing of cargo cranes, seeking to counter fears that the prevalent use of China-built cranes with advanced software at many U.S. ports poses a potential national-security risk.
   
• A Russian military pilot who defected to Ukraine, handing over his attack helicopter and receiving a $500,000 reward, has been found dead in a Spanish beach town, said Ukrainian officials and a witness who described his killing as a murder.

• The Boeing executive in charge of the factory that built the jet involved in last month’s door-plug blowout is leaving the company amid a broader leadership shake-up.
   
• The daunting task facing Navalny’s widow: Yulia Navalnaya stood by her husband’s side through arrests, trials and poisoning. Now she is vowing to continue his work.

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