IRS Logo

21.7.8  Excise Taxes (Cont. 2)

21.7.8.4 
Excise Tax Procedures

21.7.8.4.3 
Form 11-C,

21.7.8.4.3.4 
Form 11-C, Tax Decreases

21.7.8.4.3.4.2  (01-01-2005)
Form 11-C, Overpayment of Tax Due to Taxpayer Error

  1. If a person was never required to file a return (an Exam issue):

    1. Input TC 291 to decrease the incorrect amount.

    2. Input TC 591 with closing code 20 on the tax period following the last period for which the taxpayer had a liability, if any.

  2. See IRM 21.7.8.4.5.6.8, Form 8849, Schedule 6, Claims Relating To Taxes Reported on Form 11-C, for refunds on overpayments of the occupational tax.

21.7.8.4.4  (01-01-2005)
Form 730, Monthly Tax Return for Wagers

  1. Form 730, Monthly Tax Return For Wagers, is the monthly wagering tax return. The MFT is 64 and the tax class is 4.

  2. Persons liable for filing Form 730 must also file Form 11-C, Occupational Tax And Registration Return for Wagering, to be registered to accept wagers and to pay the occupational tax.

21.7.8.4.4.1  (01-01-2005)
Form 730, Who Must File

  1. Taxpayers must file Form 730 and pay the tax on wagers under IRC section 4401(a) if they:

    1. Are in the business of accepting taxable wagers

    2. Conduct a wagering pool or lottery for profit, or

    3. Are required to be registered and they received wagers for or on behalf of another person but did not report that person's name and address

21.7.8.4.4.2  (10-01-2009)
Form 730, What is Taxed

  1. The tax applies only to wagers accepted in the U.S. or placed by a person who is in the U.S. with a person who is a U.S. citizen or resident or in a wagering pool or lottery conducted by a person who is a citizen or resident of the United States. Taxable wagers include those placed:

    1. On a sports event or contest with a person engaged in the business of accepting wagers on such events

    2. In a wagering pool on a sports event or contest if the pool is conducted for profit

    3. In a lottery conducted for profit, including the numbers game, policy, punch boards, and similar types of wagering

21.7.8.4.4.3  (10-01-2009)
Form 730, What is not Taxed

  1. The tax is not imposed on the following five items:

    1. Pari-mutuel wagering, including horse racing, dog racing, and jai alai, when licensed under state law

    2. Coin-operated devices, such as pinball machines, slot machines, or video games

    3. Sweepstakes, wagering pools, or lotteries that are conducted by a state or an agency of a state, if the wager is placed with the state agency or its authorized agents or employees

    4. Games of the type in which all persons placing wagers in the game are present when wagers are placed, winners are determined, and prizes or other property are distributed

    5. Drawings conducted by an organization exempt from tax under IRC section 501 or IRC section 521, as long as the net proceeds of the drawing do not directly or indirectly benefit a private shareholder or individual

21.7.8.4.4.4  (01-01-2005)
Form 730, Rate of Tax

  1. IRC section 4401(a)(1) imposes a 0.25 percent tax on wagers authorized under the laws of the state in which accepted. The tax is computed on the gross amount of the wagers accepted during the month and reported on Line 4a.

    Example:

    If gross wagers are $1000, the tax is $2.50 ($1000 X .0025).

  2. All other taxable wagers are subject to a rate of 2 percent of the amount of the wager. The tax is computed on the gross amount of wagers accepted during the month and reported on Line 4b.

    Example:

    If gross wagers are $1000, the tax is $20 ($1000 X .02).

21.7.8.4.4.5  (01-01-2005)
Form 730, Filing Requirements

  1. Form 730, Monthly Tax Return for Wagers, is a monthly return that must be filed by the last day of the month following the month in which a taxable wager is accepted.

  2. Once a taxpayer begins filing, Form 730 must be filed each month, even if the taxpayer receives no wagers in a month, until a final return is filed. These returns will report a liability of zero for the month.

  3. If a taxpayer stops accepting wagers, a final Form 730 must be filed. The "Final Return" box should be checked on the form.

  4. When a final return is filed, input TC 591 with Closing Code (cc) 20 using FRM 49 to close filing requirements.

21.7.8.4.4.6  (01-01-2005)
Form 730, Claims

  1. Taxpayers may use line 5 of Form 730 to claim a credit for tax paid in the two following circumstances:

    1. When there is an overpayment of tax

    2. When there has been tax imposed with respect to a wager the taxpayer laid off with another person who is liable for the wagering tax

  2. The amount of the credit cannot exceed the tax liability reported on the Form 730.

  3. Alternatively, a taxpayer may make claims on Form 8849, Schedule 6, Other Claims. See IRM 21.7.8.4.5.6.7, Form 8849, Schedule 6, Claims Relating To Taxes Reported On Form 730, for additional information.

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ See IRM 21.7.8.3.2, Excise Tax Research, for additional information.

  5. The claim must be filed within 3 years from the time the return reporting the tax was filed, or two years from the time the tax was paid, whichever is later.

21.7.8.4.4.6.1  (08-24-2015)
Form 730, Claims For Overpayment of Tax

  1. Claims for overpayment of wagering tax may be filed on Form 730, Monthly Tax Return for Wagers, or Form 8849, Schedule 6, Other Claims.

  2. The following information must be submitted with each claim:

    1. The facts involving the overpayment

    2. An explanation of the reason for claiming a credit

    3. The date of payment and the amount of the tax

    4. A statement about whether any previous claim covering the amount involved, or any part, has been filed, if applicable

  3. The taxpayer must also submit a statement that the taxpayer:

    1. Has not collected (whether as a separate charge or otherwise) the amount of the tax from the person who placed the wager on which the tax was imposed;

    2. Has repaid the amount of the tax to the person that placed the wager; or

    3. Has the written consent of the person that placed the wager to the allowance of the credit. The consent must be attached to the claim.

    Reminder:

    If the overpayment relates to a laid-off wager accepted by the taxpayer, one of the above statements must be attached for both the person who placed the laid-off wager and the person who placed the original wager.

  4. Interest is allowable.

  5. Input an adjustment transaction on MFT 64 for the taxable period to which the claim relates using TC 291 for a tax decrease.

21.7.8.4.4.6.2  (01-01-2005)
Form 730, Claims for Laid-Off Wagers

  1. IRC section 6419 allows a credit to be claimed for the tax paid or due on a wager that is laid off with another taxpayer who is liable for the wagering tax.

  2. If the tax has not been paid, a credit may be claimed on Form 730, Monthly Tax Return for Wagers, for the month during which the wager was accepted in the amount of tax due for the laid-off wager.

  3. The certificate described in Reg. Section 44.6419-2(d) of the Treasury regulations must be attached to the return, along with a statement setting forth:

    1. The reason for the credit

    2. The month in which the tax was paid

    3. The date of payment

    4. Whether a previous claim covering amount involved, or any part, has been filed

  4. If the tax has been paid, a refund may be claimed for the tax paid on the laid-off wagers. The same information described in (3) above must be attached to the claim.

  5. No interest is allowable.

  6. Input an adjustment transaction on MFT 64 for the taxable period to which the claim relates using TC 766.

21.7.8.4.4.7  (10-01-2008)
Form 730, Duplicate Returns

  1. See IRM 21.7.9,BMF Duplicate Filing Conditions, for instructions on how to process duplicate returns. See IRM 21.7.8.4.1.12, Form 720, Excise Tax Reported on Duplicate, Amended or Supplemental Returns, for additional information.

  2. If the original (TC 150) and amended return were secured when adjusting the account, use BS 09. If only the amended return was needed, use BS 15.

21.7.8.4.5  (10-07-2014)
Form 8849, Claim for Refund of Excise Taxes

  1. Form 8849 is used to claim refunds relating to excise taxes. The Form 8849 is not considered correspondence under Policy Statement P-21-3. See IRM 21.3.3.2, What is the Definition of Correspondence? - Policy Statement P-21–3 (Formally P-6–12) Exclusion List, for additional information.

  2. The following schedules are attached to Form 8849, Claim for Refund of Excise Taxes:

    1. Schedule 1 - Nontaxable Use of Fuels

    2. Schedule 2 - Sales by Registered Ultimate Vendors

    3. Schedule 3 - Certain Fuel Mixtures and the Alternative Fuel Credit

    4. Schedule 5 - Section 4081(e) Claims

    5. Schedule 6 - Other Claims

    6. Schedule 8 - Registered Credit Card Issuers

    At least one schedule must be attached to Form 8849. Schedules 2, 3, 5, and 8 cannot be filed with any other schedules; therefore, each of these schedules requires a separate Form 8849.

  3. Since the Form 8849 includes all the information necessary for the IRS to determine if a claim is allowable, any person who attempts to make an informal claim without using this form must be sent the form for completion. Send an appropriate no consideration letter.

  4. If a completed Form 8849 is subsequently received, the form is considered filed as of the stamp date the original claim was received.

  5. In order to process, claimant must have a Taxpayer Identification Number (TIN), either an Employer Identification Number (EIN) or Social Security Number (SSN). Some fuel claims (schedules) require an EIN.

  6. Use CFOL command codes to research entity.

  7. If no TIN is on record or none was provided by claimant, reject claim with appropriate no consideration letter.

  8. For Schedules 1-3:

    1. Claims on Schedule 1 generally are filed for fuels used during any one or more of the quarters of the claimant's income tax year. Claims on Schedules 2 and 3 are filed for fuels sold during any period of at least a week. These quarterly and weekly claims must meet the dollar amount and time for filing requirements described for each schedule.

    2. If the dollar amount and/or the time for filing requirements are not met for quarterly and weekly claims, an annual claim must be filed for these amounts.

    3. Annual claims generally are made on Form 4136, Credit for Federal Tax Paid on Fuels, and attached to the income tax return for the year the fuel was used (or sold, as applicable). See IRM 21.7.4.4.9.1, Credit for Federal Tax Paid on Fuels, Form 4136.

    4. Annual claims by the United States, state and local governments, and organizations exempt from income tax under IRC section 501(a) (provided that the organization is not required to file Form 990 T, Exempt Organization Business Income Tax Return, for that taxable year) are made on Form 8849, Schedule 1, Nontaxable Use of Fuels. For these claimants, the annual claim must be filed within 3 years of the close of the claimant's taxable year. The taxable year is based on the calendar year or fiscal year it regularly uses to keep its books. There is no minimum dollar amount on the annual claim.

    5. Ultimate Vendor claims may be received prior to a return posting (TC 150). If so, adjust claim using appropriate MFT 02, 05, 06, or 34 tax module for income tax return filed by taxpayer. Use tax year relative to tax period on claim (such as 201208 or 201212). If taxpayer is a fiscal year filer, the correct Fiscal Year Month (FYM) must be used. For Ultimate Purchaser claims, use MFT 40.

    6. When processing fuel tax claims, the credit adjustment must be input on the tax year indicated on Form 8849. (Check CC ENMOD for fiscal year filer.)

    Caution:

    When the taxpayer has specific filing requirements (Form 1120, U.S. Corporation Income Tax Return; Form 1120-C, U.S. Income Tax Return for Cooperative Associations; Form 990-T, Exempt Organization Business Income Tax Return; Form 1065, U.S. Return of Partnership Income; Form 1041, U.S. Income Tax Return for Estates and Trusts; or Form 1040, U.S. Individual Income Tax Return), and it is within two cycles of return's original due date, input the adjustment on the next tax year. For example, a claim for December 2012 would be input on tax year 2013 once it is two cycles from the March 15, 2013 return due date. This procedure avoids UPC 313 RC (9). This is not necessary for Ultimate Purchaser claims processed on MFT 40.

  9. If claim adjustment is input on MFT 02, follow IRM 21.4.6.4, Refund Offset Research, for Debtor Master File/Tax Offset Program (DMF/TOP) research.

    Caution:

    If taxpayer has DMF/TOP debt for the current processing year (PY), refer to Document 6209, Section 5 for a list of Agency and Sub Agency (AG/SA) Codes.

21.7.8.4.5.1  (05-20-2009)
MFT 40, Ultimate Purchaser Claims

  1. MFT 40 is used to process Ultimate Purchaser Claims (End User Claims). Interest bearing ultimate vendor claims (20- and 45-day time frames) must not be processed on MFT 40.

    Note:

    Effective 01/01/2007, the tax class for MFT 40 is 3.

  2. Ultimate Purchaser Claims must be processed on MFT 40 using the following procedures:

    1. A dummy module must be created for the first claim that is processed using CC ACTON. (See the Command Code Job Aid on SERP, http://serp.enterprise.irs.gov/databases/irm-sup.dr/job_aid.dr/command-code.dr/idrs_command_codes_job_aid.htm.) This establishes the MFT 40 module and is not required after the TC 150 posts to the module.

    2. Input TC 290 using the appropriate CRN for the fuel tax credit. The first TC 290 generates a TC 150 for zero tax liability.

    3. Let the refund generate systemically; do not issue a manual refund.

    4. If it is necessary to input a manual refund, use priority code 6 with your adjustment. This alerts Master File that a TC 840 has been input and a TC 846 will not generate. Never use priority code 6 unless you are issuing a manual refund.

  3. One refund generates per cycle for the TC 290. If there are multiple transactions (TC 290), one refund generates the total of the credits per cycle.

    Example:

    For cycle 201250, two Ultimate Purchaser claims were processed for $800.00 each. The module will show one refund (TC 846) for $1,600.00 during the cycle.

  4. A CP 210 generates for each cycle, notifying the taxpayer of the refund.

  5. If a notice needs to be stopped, use appropriate hold code and write a letter of explanation to the taxpayer.

21.7.8.4.5.2  (10-01-2009)
Form 8849, Schedule 1, Nontaxable Use of Fuels

  1. Schedule 1 claims may be made only by the ultimate purchaser of the fuel. In the case of export, the exporter is the ultimate purchaser. Ultimate purchasers include purchasers of undyed diesel, undyed kerosene, gasoline, kerosene used for aviation gasoline and liquefied petroleum gas (LPG). To be considered a valid claim, the following requirements must be met:

    1. Claim must be at least $750.00.

    2. The $750.00 amount may be met by making a claim for fuel used during any quarter of a claimant's income tax year or aggregating amounts from any quarters of the claimant's income tax year for which no other claim has been made.

    3. If dollar amount and/or the time for filing requirements are not met, an annual claim or a claim for qualifying aggregate amounts must be filed.

    4. Claim must be filed during the first quarter following the last quarter included in the claim.

      Example:

      If a claim is filed for two quarters, January through March and April through June, the claim must be filed between July 1 and September 30.

    5. Only one claim may be filed for a quarter.

    6. Annual claims are made on Form 4136, Credit for Federal Tax Paid on Fuels, attached to the income tax return. (See IRM 21.7.4.4.9.1, Credit for Federal Tax Paid on Fuels, Form 4136.)

  2. Types of fuel, credit reference numbers (CRN's), and tax rate for Form 8849, Schedule 1, Nontaxable Use of Fuels, are:

    Fuels (Nontaxable Use) Credit Reference Number (CRN's) Credit/Payment Rate per Gallon
    Gasoline 362 $.183
    Exported gasoline 411 $.184
    Aviation gasoline used in commercial aviation (other than foreign trade) 354 $.15
    Aviation gasoline (other nontaxable use) 324 $.193
    Exported Aviation gasoline 412 $.194
    LUST tax on aviation fuel used in foreign trade 433 $.001
    Undyed diesel fuel for nontaxable use and for use on a farm for farming purposes 360 $.243
    Undyed diesel fuel for use in trains 353 $.243
    Undyed diesel fuel for use in certain intercity and local buses 350 $.17
    Nontaxable use of undyed kerosene taxed at $.244 346 $.243
    Undyed kerosene used on a farm for farming purposes 346 $.243
    Undyed kerosene for use in certain intercity and local buses 347 $.17
    Kerosene taxed at $.244 used in commercial aviation (other than foreign trade) 417 $.200
    Kerosene taxed at $.219 used in commercial aviation (other than foreign trade) 355 $.175
    Nontaxable use in aviation (other than use by a state or local government) taxed at $.244 346 $.243
    Nontaxable use in aviation (other than by a state or local government) taxed at $.219 369 $.218
    LUST tax on aviation fuels used in foreign trade 433 $.001
    Liquefied petroleum gas 419 $.183
    "P Series" fuels 420 $.183
    Compressed natural gas (CNG) (GGE=126.67 cu. ft.) 421 $.183
    Liquefied hydrogen 422 $.183
    Any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process 423 $.243
    Liquid fuel derived from biomass 424 $.243
    Liquefied natural gas (LNG) 425 $.243
    Liquefied gas derived from biomass 435 $.183
    Nontaxable use of diesel-water-fuel emulsion 309 $.197
    Nontaxable use of exported diesel-water-fuel emulsion 306 $.198
    Exported undyed diesel fuel 413 $.244
    Exported dyed diesel fuel and exported gasoline blendstocks taxed at $.001 415 $.001
    Exported undyed kerosene 414 $.244
    Exported dyed kerosene 416 $.001
  3. Input adjustment with TC 290 on MFT 40 using appropriate CRN. No interest is allowable. See IRM 21.7.8.4.5.1, MFT 40, Ultimate Purchaser Claims, for adjustment procedures. Use the following category codes for Form 8849, Schedule 1, Nontaxable Use of Fuels, claims:

    • SC1P for a paper-filed Schedule 1

    • SC1E for an electronically-filed Schedule 1

  4. If claim is a full disallowance (such as an expired period):

    • Input TC 290.

    • Use Blocking series 44 (if no TC 150).

    • Use Blocking series 98 (if TC 150 posted).

    • Issue 105C (full disallowance letter).

  5. If claim is a partial disallowance (i.e., a portion of the claim period is filed late):

    • Input TC 290.

    • Use Blocking Series 40 (if no TC 150).

    • Use Blocking Series 15 (If TC 150 posted; Block 00 if return is attached to your adjustment).

    • Use appropriate CRN for portion of claim that is allowed.

    • Issue 106C (partial disallowance letter).

21.7.8.4.5.3  (10-30-2014)
Form 8849, Schedule 2, Sales by Registered Ultimate Vendors

  1. A registered ultimate vendor of undyed diesel fuel, undyed kerosene, kerosene sold for use in aviation, gasoline, or aviation gasoline uses Schedule 2 to make a claim for refund. An ultimate vendor is the person who sold the fuel to the ultimate purchaser.

  2. When requested by the schedule, the ultimate vendor claimant must enter a valid registration number. The claimant is considered registered if they received a letter of registration from the IRS. The letter of registration provides a registration number, the approved activity (Activity Letter), and the conditions of registration. The Form 637, Application for Registration (For Certain Excise Activities), is used to obtain the appropriate registration. ExTRAS (Excise Tax Registration Authentication System) and IMS (Issue Management System) are used to determine whether the registration number has been revoked or suspended by the IRS. If the registration number provided on the schedule is not on file or is revoked or suspended, reject the claim using no consideration procedures. An ultimate vendor may be registered for one or more of the following activities:

    • UV- Ultimate vendor that sells undyed diesel fuel, undyed kerosene, gasoline, or aviation gasoline

    • UB- Ultimate vendor that sells undyed diesel fuel or undyed kerosene for use in certain intercity and local buses

    • UP-Ultimate vendor that sells kerosene sold from a blocked pump

    • UA-Ultimate vendor that sells kerosene for use in aviation

    See the table below for the requirements to determine a qualified claim:

    If Ultimate Vendor For: Then Allowable Sales Must Be For: Requirements That Claim Must Meet:
    Undyed diesel fuel
    • Use by a state or local government (Use CRN 360 at tax rate $.243.)

    • Use in certain intercity and local buses (Use CRN 350 at tax rate $.17.)

    • Claimant sold the diesel fuel at a tax excluded price, repaid the amount of tax to the buyer, or obtained written consent of the buyer to make the claim.

    • Claimant has obtained the required certificate from the buyer and has no reason to believe any information in the certificate or statement is false.

    • Claimant certifies there is no visible evidence of dye in the fuel.

    • Registered ultimate vendor of diesel fuel is the only person eligible to make this claim and has obtained the required certificate from the buyer. Registration number must be entered on Form 8849.

    • Must be for diesel fuel sold during a period of at least one week.

    • Amount of claim must be at least $200.00. (To meet this minimum, lines 1, 2, and 3 may be combined.)

    • Must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim.

    • Information for each governmental unit to which the diesel fuel was sold and the number of gallons sold to each must be reported if a claim amount is reported on line 2a.

    Registered ultimate vendor of undyed kerosene (other than kerosene for use in aviation)
    • Use by a state or local government (Use CRN 346 at tax rate $.243.)

    • Sales from a blocked pump (Use CRN 346 at tax rate $.243.)

    • Use in certain intercity and local buses (Use CRN 347 at tax rate $.17.)

    • Claimant has obtained the required certificate from the buyer and has no reason to believe any information in the certificate or statement is false.

    • Claim must be for kerosene sold for a period that is at least one week.

    • Amount of claim must be at least $100.00. (To meet the minimum, amounts from lines 2 and 3 may be combined.)

    • Claim must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim.

    • Information for each governmental unit to whom the kerosene was sold and the number of gallons sold to each must be reported if a claim amount is reported on line 2a.

    Registered ultimate vendors of kerosene for use in aviation
    • Use in commercial aviation (other than foreign trade) taxed at $.219 (Use CRN 355 at tax rate $.175.)

    • Use in commercial aviation (other than foreign trade) taxed at $.244 (Use CRN 417 at tax rate $.200.)

    • Nonexempt use in noncommercial aviation (Use CRN 418 at tax rate $.025.)

    • Other nontaxable uses taxed at $.244 (Use CRN 346 at tax rate $.243.)

    • Other nontaxable uses taxed at $.219 (Use CRN 369 at tax rate $.218.)

    • LUST tax on aviation fuels used in foreign trade (Use CRN 433 at tax rate $.001.)

    • Registered ultimate vendor of kerosene used in commercial aviation or nontaxable uses is the only person eligible to make this claim if the buyer waives his or her right by providing the registered ultimate vendor with an unexpired waiver. For nonexempt use in noncommercial aviation fuel, a registered ultimate vendor of aviation is the only person eligible to make the claim if buyer provides vendor with an unexpired certificate.

    • Claim must be for kerosene used in aviation sold during a period that is at least 1 week.

    • The amount of the claim must be at least $100.00. (To meet this minimum, amounts from lines 2 and 3 may be combined.)

    • The claim must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim.

    Registered ultimate vendors of gasoline
    • Use by a nonprofit educational organization (Use CRN 362 at tax rate $.183.)

    • Use by a state or local government (including essential government use by an Indian tribal government). (Use CRN 362 at tax rate $.183.)

    • Claimant has obtained the required certificate from the buyer and has no reason to believe any information in the certificate or statement is false.

    • Claim must be for gasoline sold during a period that is at least 1 week.

    • Amount of claim must be at least $200.00. (To meet this minimum, amounts from lines 4(a), 4(b), 5(a), and 5(b) may be combined.)

    • Claim must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim.

    • Information for each nonprofit educational organization or governmental unit to whom the gasoline was sold and the number of gallons sold to each must be reported if a claim amount is reported on line 2a.

    Registered ultimate vendor of aviation gasoline
    • Use by a nonprofit educational organization (Use CRN 324 at tax rate of $.193.)

    • Use by a state or local government (including essential government use by an Indian tribal government) (Use CRN 324 at tax rate $.193.)

    • Claimant has obtained the required certificate from the buyer and has no reason to believe any information in the certificate or statement is false.

    • Claim must be for gasoline sold during a period that is at least 1 week.

    • Amount of claim must be at least $200.00. (To meet this minimum, amounts from lines 4(a), 4(b), 5(a), and 5(b) may be combined.)

    • Claim must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim.

    • Information for each nonprofit educational organization or governmental unit to whom the gasoline was sold and the number of gallons sold to each must be reported if a claim amount is reported on line 2a.

  3. If an ultimate vendor claim is not filed within the required time frame (during a period of at least one week and by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim), reject the claim using no consideration procedures.

  4. Ultimate vendor claims that do not provide the required information can be perfected with a telephone call to the claimant. If there is no response within three business days, reduce the claim by the entries that are not complete and send a letter of explanation to the taxpayer.

    Example:

    An ultimate vendor submits a claim for undyed diesel fuel that was sold to a state and includes the required information list (EIN, name, and number of gallons of fuel sold) for each customer to whom he sold the fuel. The claim also includes gasoline sold to a nonprofit organization, but the customer information is missing. Call the ultimate vendor for the missing information and if there is no response within three business days, reduce the amount of refund for the gasoline entry and issue a 106C letter using partial disallowance procedures.

  5. If the claim address does not match the address of record, use the table below:

    IF THEN
    The claim is allowable. Send the refund to the address of record and:
    (1) Send a 104C letter to the address of record.

    Note:

    If a 104C letter has been issued within the last 6 months, do not issue another 104C. Issue refund to address of record.


    (2) Advise the taxpayer that a refund claim was received with the taxpayer's EIN but the claim address did not match the address of record.
    (3) If the taxpayer needs to change the address of record, a Form 8822, Change of Address, is required. (The 104C letter states how the form can be obtained by the taxpayer.)
    The claim is not allowable. Reject the claim using "no consideration" procedures and return the rejected claim to the address on the claim. (See below for procedures.)
    The taxpayer disagrees and gives an explanation of why it is not possible to change the address of record and needs to add another address (multiple locations, etc.). Advise the taxpayer that only one address of record is permitted and the refunds will continue to be sent to the address of record. Update IDRS with the following history item: 104C/REPLY. (Do not need to write additional 104C letters if there are multiple claims.)

    Note:

    Do not accept a fax copy of Form 8822, Change of Address, for an ultimate vendor claim. See IRM 21.3.4.12.8, Use of FAX for Taxpayer Submissions.

  6. Ultimate vendor claims are interest bearing fuel claims (IRC 6427). Electronically filed (e-file) interest bearing fuel claims must be processed within 20 days and paper filed claims must be processed within 45 days of receipt to avoid the payment of credit interest. If an allowable claim is not processed within these time frames, interest must be paid from the claim received date to the refund scheduled date less the appropriate back-off period.

    Note:

    When computing IRC 6427 allowable credit interest, the prior refunds and offsets on the tax module must be considered when determining whether the GATT threshold of $10,000 has been met. IRM 20.2.4, Overpayment Interest, provides credit interest guidelines. IRM 20.2.4.9.2, Determining the GATT Threshold, provides specific information regarding the GATT threshold.

  7. The instructions below must be used to process valid interest bearing (20- or 45-day) fuel claims.

    1. Check fiscal year, MFT/ filing requirements using CC ENMOD.

      Note:

      Fuel claims can be filed on several MFTs (02, 05, 06, 34). To avoid duplicate filings, all of the MFTs that meet the taxpayer's filing requirements must be reviewed before allowing the claim. Sole proprietors without income tax filing requirements use MFT 02. If duplicate claims are found on multiple MFTs, send the claim with supporting documentation CATA for review.

    2. Check CC TXMOD and CC ENMOD for pending transactions.

    3. Math verify the claim.

    4. Using CFOL, check for debit balances for offset. See IRM 21.5.6.4, Freeze Code Procedures, for freeze code definitions.

  8. Adjust account as follows:

    1. If no TC 150 is posted to the tax module, use blocking series 40.

    2. If TC 150 is posted to the tax module, use appropriate blocking series and input TC 770 for zero to restrict interest.

    3. Use TC 290 and applicable CRN, with allowable refund amount and no minus sign. A TC 766 will generate on Master File.

    4. Use the following category codes for Schedule 2, Sales by Registered Ultimate Vendors, claims: SC2P for a paper-filed claim and SC2E for an electronically-filed claim.

    5. Use a Hold Code 4 on the adjustment when issuing a manual refund.

    6. Interest bearing fuel claims require a manual refund. See IRM 21.4.4, Manual Refunds, for manual refund procedures. The Accounting function within Submission Processing approves manual refund documentation. In order to meet the Accounting function deadlines, manual refund documentation for e-filed fuel claims must be input no later than the 15th day of receipt and the 42nd day for paper fuel claims. See IRM 20.2.10.3.3, Special Interest Rules, for additional information.

      Note:

      Due to the volume of ultimate vendor claims, the Excise Operation cannot use the Integrated Automation Technology (IAT) Manual Refund Tool described in IRM 21.4.4.5.1, Monitoring Manual Refunds. IRM 21.7.8.3.5, Monitoring Centralized Excise Manual Refunds, provides manual refund monitoring guidance.

  9. If claim is a full disallowance (such as an expired period):

    • Input TC 290.

    • Use Blocking series 44 (no TC 150).

    • Use Blocking series 98 (if TC 150 posted).

    • Issue 105C (full disallowance letter).

  10. If claim is a partial disallowance (e.g., a portion of the claim period is filed late, missing customer information.):

    • Input TC 290.

    • Use Blocking Series 40 (if no TC 150).

    • Use Blocking Series 15 (if TC 150 posted; Block 00 if return is attached to your adjustment).

    • Use appropriate CRN for portion of claim that is allowed.

    • Issue 106C (partial disallowance letter).

  11. See Schedule 2 and its instructions for more information on claim requirements.

21.7.8.4.5.4  (02-12-2015)
Form 8849, Schedule 3, Certain Fuel Mixtures and the Alternative Fuel Credit

  1. The Form 8849, Schedule 3, is used to submit refund claims for biodiesel mixture credits, renewable mixture credits, and alternative fuel credits.

  2. Claims for Biodiesel, Renewable Diesel Mixture Credits, Alternative Fuel Credits, and Alternative Fuel Mixture Credits allowable under IRC 6426 and 6427 expired for fuels sold or used after December 31, 2013. The liquefied hydrogen mixture credit expired on September 30, 2014. The Tax Increase Prevention Act of 2014 (Pub. L. 113–295) reinstated the credits for the calendar year 2014. Fuel claims reporting these credits for claim periods after December 31, 2014 must not be paid by the Service.

    Note:

    Notice 2015–3 provides one-time claim requirements for biodiesel (including renewable diesel) mixtures and alternative fuels sold or used during the calendar year 2014. These credits are collectively known as 2014 biodiesel and alternative fuel incentives. IRM 21.7.8.4.7.3.1, 2014 Biodiesel and Alternative Fuel Incentives Claims, provides the one-time claim requirements. For 2014, all alternative fuel mixture credit claims allowed under IRC 6426(e), including claims for the fourth quarter, must be submitted on Form 720X. IRM 21.7.8.4.7.3.2, 2014 Alternative Fuel Mixtures Claim Under 6426(e), provides additional claim detail.

    Note:

    Per the American Taxpayer Relief Act of 2012, retroactive fuel claims must be filed on Form 720X. For additional information see IRM 21.7.8.4.7.2, American Taxpayer Relief Act (ATRA) of 2012 Retroactive Fuel Claims.

  3. Before claiming a refund on Form 8849, Schedule 3, any biodiesel or renewable diesel mixture credit must first be taken on Form 720, Quarterly Federal Excise Tax Return, Schedule C, as a credit against the taxable fuel liability for gasoline, diesel fuel, or kerosene (IRS Nos. 60, 104, 105, 107, 119, 35, 69, 77, 111, 62, and 14) reported on Form 720. The alternative fuel credit must first be taken on Form 720 as a credit against the taxable alternative fuel liabilities reported on Form 720 (IRS Nos. 112, 118, 120, 121, 122, 123, 124, and 79). Any excess credit may be taken on Schedule C (Form 720), Form 8849 (Schedule 3), or Form 4136.

  4. The alcohol fuel mixture credit (line 1) expired for claim periods after 12/31/2011. The Schedule 3 (Rev. December 2012), line 1, has been marked reserved.

  5. The biodiesel mixture credit is allowed for each gallon of biodiesel used to produce a biodiesel mixture that is at least 0.1 percent (by volume) diesel fuel. The person that produced and sold or used the mixture in their trade or business is the only person eligible to make this claim. The biodiesel used to produce the mixture must:

    1. Meet ASTM D6751

    2. Meet EPA's registration requirements for fuels and fuel additives under section 211 of the Clean Air Act

    Note:

    Claimant must attach the Certificate for Biodiesel and, if applicable, the Statement of Biodiesel Reseller.

  6. The renewable diesel mixture credit is allowed for each gallon of renewable diesel in the mixture if the claimant produced a mixture by mixing renewable diesel with liquid fuel (other than renewable diesel). The renewable diesel used to produce the renewable diesel mixture must:

    1. Be derived from biomass

    2. Meet EPA's registration requirements for fuels and fuel additives

    3. Meet ASTM D975, D396, or other equivalent standard approved by the IRS

    4. Be sold by the claimant to any person for use as a fuel or was used as a fuel by the claimant

      Note:

      Claimant must attach the Certificate for Biodiesel and, if applicable, the Statement of Biodiesel Reseller.

      Note:

      Renewable diesel is considered a taxable fuel. If the claimant did not report IRS No. 60 on Form 720, it does not mean that the tax has not been paid and further IRS Number (abstract) research may be needed to determine whether the excise tax was paid.

    See the chart below for the rates and requirements for Biodiesel and Renewable Diesel Mixture Credit.

    Biodiesel or Renewable Diesel Mixture Credit The Rate Is: Requirements Are:
    Biodiesel Mixture Credit (other than agri-biodiesel mixtures) $1.00 per gallon of biodiesel (CRN 388, effective 01/01/2009)
    • Claim must be for a biodiesel fuel mixture sold or used during a period that is at least one week.

    • Claim amount must be at least $200 unless filed electronically.

    • Combine lines 2 and 3 of Schedule 3 to meet the minimum requirement.

    • The claim must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim.

    Agri-biodiesel mixtures (derived solely from virgin oils, including virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, safflowers, flaxseeds, rice bran, mustard seeds, and from animal fats) $1.00 per gallon of biodiesel (CRN 390) Same as above
    Renewable diesel mixture $1.00 per gallon of renewable diesel mixture (CRN 307) Same as above
  7. The alternative fuel credit is allowed for each gallon or gallon equivalent of alternative fuel. The registered alternative fueler is the only person eligible to make the claim and must have:

    1. Sold an alternative fuel at retail and delivered it into the fuel supply tank of a motor vehicle or motorboat; or

    2. Delivered the alternative fuel in bulk for taxable use in a motor vehicle or motor boat and received the required statement of taxable use from the buyer; or

    3. Used an alternative fuel (not sold at retail or in bulk) in a motor vehicle or motorboat; or

    4. Sold the alternative fuel for use as a fuel in aviation

    See the chart below for the alternative fuel credit rates and requirements:

    Alternative Fuel Credit per Gallons or Gasoline Gallon Equivalents Requirements Are:
    Liquefied petroleum gas (LPG) $.50 (CRN 426)
    • Claim must be for an alternative fuel or alternative fuel mixture sold or used during a period of at least one week.

    • Claimant must be registered with the IRS.

    • Claim amount must be at least $200 unless filed electronically.

    • Combine lines 2 and 3 of Schedule 3 to meet minimum requirement (electronically, any amount).

    • Claim must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim.

    "P Series fuels" .50 (CRN 427) Same as above
    Compressed natural gas (CNG) .50 (CRN 428) Same as above
    Liquefied hydrogen .50 (CRN 429) Same as above
    Fischer-Tropsch process liquid fuel derived from coal (including peat) .50 (CRN 430) Same as above
    Liquid fuel derived from biomass .50 (CRN 431) Same as above
    Liquefied natural gas (LNG) .50 (CRN 432) Same as above
    Liquefied gas derived from biomass .50 (CRN 436) Same as above
    Compressed gas derived from biomass .50 (CRN 437 GGE = 121 cu.ft.) Same as above
  8. The alternative fuel mixture credit must first be taken on Schedule C to reduce the taxable fuel liability for gasoline, diesel fuel, and kerosene reported on Form 720.

    Note:

    Alternative fuel mixtures produced after 12/31/2011 can only be claimed on Form 720, Schedule C, and limited to Part I fuel tax liabilities IRS Nos. 112, 118, 120, 121, 122, 123, 124, and 79.

  9. The biodiesel mixture credit and alternative fuel credit may not be claimed for biodiesel or alternative fuel produced outside the United States for use as a fuel outside the United States. The United States includes any possession of the United States.

  10. IRM 21.7.8.4.5.4.2, Form 8849, Schedule 3, Processing Claims for Certain Fuel Mixtures and the Alternative Fuel Credit, provides adjustment procedures.

21.7.8.4.5.4.1  (01-24-2011)
Form 8849, Schedule 3, Certain Fuel Mixtures and the Alternative Fuel Credit, Time Frames for Interest Bearing Claims

  1. The claims are interest bearing and must be processed within 20 days (electronically-filed) or 45 days (paper-filed) of receipt.

  2. A manual refund is required for interest bearing fuel claims. See IRM 21.7.8.4.5.3 paragraphs (3) through (10) for interest bearing ultimate vendor claim procedures and manual refund requirements.

21.7.8.4.5.4.2  (11-08-2010)
Form 8849, Schedule 3, Processing Claims for Certain Fuel Mixtures and the Alternative Fuel Credit

  1. Use the following instructions to process valid alternative fuel mixture and biodiesel mixture claims:

    1. Claims must be reviewed by a classifier. The claim must have a classification stamp prior to processing.

    2. If the claim is accept as filed, use the same procedures for the MFT, filing requirements and research for the adjustment as used on Form 8849, Schedule 2. See IRM 21.7.8.4.5.3 (7) and (8) for instructions.

    3. Use the following category codes for Form 8849, Schedule 3, Certain Fuel Mixtures and the Alternative Fuel Credit, claims: SC3P for a paper-filed claim and SC3E for an electronically-filed claim.

  2. If claim is a full disallowance (such as an expired period):

    • Input TC 290.

    • Use Blocking series 44 (if no TC 150).

    • Use Blocking series 98 (if TC 150 posted).

    • Issue 105C (full disallowance letter).

  3. If claim is a partial disallowance (e.g., a portion of the claim period is late):

    • Input TC 290.

    • Use Blocking Series 40 (if no TC 150).

    • Use Blocking Series 15 (if TC 150 posted; Block 00 if return is attached to your adjustment).

    • Use appropriate CRN for portion of claim that is allowed.

    • Issue 106C (partial disallowance letter).

  4. If missing information can be resolved by a telephone call, attempt to call the taxpayer before partially disallowing the claim.

    Note:

    If 105C or 106C letter is written, do not send the claim back to the taxpayer. The claim must stay with the adjustment DLN. If 916C letter is written, you must send the claim back with the letter.

21.7.8.4.5.5  (10-01-2009)
Form 8849, Schedule 5, IRC Section 4081(e) Claims

  1. A person who has paid and reported a section 4081 fuel tax to the government uses Form 8849, Schedule 5 to claim a refund of that tax if another taxpayer has also paid and reported the same fuel tax to the government. The tax liability has been paid and reported twice for the same fuel.

  2. These claims may only be made on Form 8849, Schedule 5, IRC section 4081(e) Claims. They are not allowable on Form 720, Quarterly Federal Excise Tax Return, or Form 4136, Credit for Federal Tax Paid on Fuels. See Reg. Section 48.4081-7 of the Manufacturers and Retailers Excise Tax Regulations.

    Note:

    Section 4081 claims may be filed electronically.

  3. The person who reported on Form 720 and paid the second tax to the government is the only person eligible to make this claim. Types of fuel that are allowable on the claim are:

    Type of Fuel CRN
    Gasoline 362
    Aviation gasoline 324
    Diesel fuel 360
    Kerosene 346
    Diesel-water fuel emulsion 309
    Dyed diesel fuel, dyed kerosene, and other exempt removals 369
    Kerosene for use in commercial aviation (other than foreign trade) 355
  4. Information that must be attached to the claim:

    1. A copy of the First Taxpayer's Report

    2. A copy of the "Statement of the Subsequent Seller" (if the fuel was bought from someone other than the first taxpayer) that the claimant received with respect to the fuel covered on the claim

    3. First Taxpayer's Report must have all of the information in the Certificates A and B. See Publication 510, Appendix B, for an example of the certificates.

  5. There is no minimum amount for this claim.

  6. The claim must be filed within 3 years from the time the return for the second tax was filed or 2 years from the time the second tax was paid to the government, whichever is later.

  7. No interest is allowable.

  8. Research master file to verify a return was filed and tax paid.

  9. Send all Form 8849, Schedule 5, 4081(e) claims CAT-A.

21.7.8.4.5.5.1  (10-01-2009)
Form 8849, Schedule 5, IRC Section 4081(e) Claims Selected by Examination

  1. If the case is selected by Exam, the taxpayer is contacted by the Area Office within 30 days after receiving the file.

  2. Claims approved by the Area Office Excise Tax Group are annotated "Accepted" and returned to the Service Center Exam Classification IRC section on Form 3210, Document Transmittal, with a Memo to File for processing. The case is forwarded to Excise Operations for processing.

  3. These claims require expedite processing and must be worked immediately upon receipt.

  4. If claim accepted by Examination, adjust account using TC 290.00 with appropriate CRN (without a minus). Use hold code 3 and the following category codes:

    • SC5P for paper-filed claims

    • SC5R for electronically-filed claims

  5. Interest is not allowed; restrict module with TC 770.00.

  6. If claim is full disallowance (such as an expired period):

    1. Input TC 290.

    2. Use Blocking series 98.

    3. Issue 105C (full disallowance letter).

  7. If claim is a partial disallowance (e.g., a portion of the claim period is late):

    • Input TC 290.

    • Use Blocking Series 15.

    • Use Block Series 00 if the original return is attached to the adjustment document.

    • Use appropriate CRN for portion of claim that is allowed.

    • Issue 106C (partial disallowance letter).

21.7.8.4.5.6  (01-28-2010)
Form 8849, Schedule 6, Other Claims

  1. Schedule 6 is used to report claims other than those reported on Schedules 1-5, including claims for overpayments of taxes reported on Form 720, Quarterly Federal Excise Tax Return, Form 2290, Heavy Highway Vehicle Use Tax Return, Form 730, Monthly Tax Return for Wagers, and Form 11-C, Occupational Tax and Registration Return for Wagering. The following information must be attached to each Schedule 6 claim:

    1. A detailed description of the claim

    2. Any supporting information required by regulation

    3. How the claim amount was figured

  2. Electronic filing is available for Form 8849, Schedule 6, Other Claims. These claims are not "ultimate vendor" claims and do not have to be processed for refund in twenty days. (Normal processing time of 45 days from received date must be used.).

  3. See IRM 21.7.8.4.5.5.1 (6) and (7) for full disallowance and partial disallowance procedures for all Form 8849, Schedule 6, claims.

  4. Use the following category codes for all Schedule 6 claims:

    • SC6P for paper-filed claims

    • SC6E for electronically-filed claims

  5. Schedule 6 is not used to make adjustments to prior quarter liabilities reported on Form 720. The taxpayer is required to use Form 720X, Amended Quarterly Federal Excise Tax Return. For example: adjustments required to an IRS No. (abstract).

    Exception:

    The Form 720 Instructions or media notification advises the taxpayer to use a Form 8849, Schedule 6, to file a specific type of claim.

21.7.8.4.5.6.1  (05-20-2009)
Form 8849, Schedule 6, Claims Relating to Tax on Form 720

  1. Claims for tax reported on Form 720, Quarterly Federal Excise Tax Return, can be made for the following:

    Tax CRN
    Ozone-depleting chemicals 398
    Truck, trailer and semitrailer chassis and bodies and tractors 383
    Passenger vehicles (luxury tax) 392
    Taxable tires other than bias ply or super single tires 396
    Taxable tires, bias ply or super single tires 304
    Taxable tires, super single tires designed for steering 305
    Gas guzzler automobiles 340
    Vaccines 397
    Medical Devices 438
    Sport fishing equipment 341
    Fishing rods and fishing poles 308
    Fishing tackle boxes 387
    Electric outboard motors 342
    Bows, quivers, broadheads, and points 344
    Arrow shafts 389

21.7.8.4.5.6.2  (01-01-2007)
Form 8849, Schedule 6, Ozone-depleting Chemicals (ODCs)

  1. Generally, there is no tax on ODCs sold for export if certain requirements are met. The manufacturer may file the claim if tax was paid. See IRC section 4662(e).

  2. Under IRC section 4682 (d) (3), a claim may be allowed for taxed ODCs that are exported, if the IRC section 4662(e)(2) conditions for allowance are met.

  3. Under IRC section 4682 (g) (2), a claim may be allowed for taxed ODCs used as a propellant in a metered-dose inhaler.

  4. Under IRC section 4682(d)(2)(A), a claim may be allowed for taxed ODCs used as a feedstock.

  5. The claim is made by the person who used the ODC as described.

  6. No interest is allowable.

  7. Input the adjustment using CRN 398.

21.7.8.4.5.6.3  (08-24-2015)
Form 8849, Schedule 6, Tires, Gas Guzzler Automobiles, Vaccines, Sport Fishing Equipment, Bows, and Arrow Components

  1. The manufacturer may be eligible to obtain a credit or refund of the manufacturer's excise tax for certain uses, sales, exports, and price readjustments. The claim must set forth in detail the facts upon which the claim is based. A credit or refund (without interest unless otherwise noted) of the tax may be allowable if a tax-paid article is, by any person:

    • Exported,

    • Used or sold for use as supplies for vessels (except vaccines),

    • Sold to a state or local government for its exclusive use (except gas guzzler automobiles and vaccines),

    • Sold to a nonprofit educational organization for its exclusive use (except gas guzzler automobiles and vaccines),

    • Sold to a qualified blood collector organization for its exclusive use (except for gas guzzler automobiles, recreational equipment, and vaccines)

    • Readjusted the price (tax based on price), no IRC section 6416(a) requirements

    • Sold (for tires only) for use by the purchaser in connection with an intercity, local, or school bus, or sold by any person on or in connection with any other article that is sold or used in an activity listed above or with a bus chassis or body

      Note:

      Tires used exclusively on mobile machinery are exempt from the tire tax.

21.7.8.4.5.6.4  (01-01-2007)
Form 8849, Schedule 6, Gas Guzzler Automobiles

  1. Under Reg. Section 48.4064-1 (e) (2), a claim may be allowed for gas guzzler vehicle used or resold for law enforcement, ambulance, or firefighting purposes, if the IRC section 6416(a) conditions to allowance are met.

  2. Input adjustment using TC 290 with CRN 340 for dollar amount. Interest is allowable.

21.7.8.4.5.6.5  (01-01-2007)
Form 8849, Schedule 6, Vaccine

  1. Under IRC section 4132 (b), a claim for a credit or refund may be allowed for a vaccine returned (other than for resale) to the person who paid the tax, or a vaccine that is destroyed. The IRC section 6416(a) conditions to allowance must be met.

  2. These claims must be filed within 6 months after the vaccine is returned or destroyed.

  3. No interest is allowable.

  4. To claim a credit or refund, the person who paid the tax must have repaid or agreed to repay the tax to the ultimate purchaser of the vaccine or obtained the consent of such purchaser to allowance of the credit or refund. See IRM 21.7.8.4.1.4.7.3, Excise Tax on Vaccines, for a list of taxable vaccines.

  5. Input adjustment using TC 290.00, CRN 397 and TC 770.00.

21.7.8.4.5.6.6  (10-07-2014)
Form 8849, Schedule 6, Coal Claims

  1. All coal claims are Category A (CAT-A) Examination criteria and must be referred per IRM 21.7.8.3.2, Excise Tax Research.

21.7.8.4.5.6.7  (01-01-2005)
Form 8849, Schedule 6, Claims Relating to Taxes Reported on Form 730

  1. Input an adjustment transaction on MFT 64 for the taxable period to which the claim relates. IRC section 6419 allows a refund to be claimed for the tax paid on a wager that is laid off with another taxpayer who is liable for the wagering tax. No interest is allowable.

  2. Input adjustment using TC 766 for credit amount.

  3. Each claim must have the certificate described in Reg. Section 44.6419-2(d) and a statement that sets forth:

    1. The reason for the refund.

    2. The month in which the tax was paid.

    3. The date of payment.

    4. Whether any previous claim covering the amount involved, or any part, has been filed.

  4. A claim may be filed for an overpayment of tax under IRC section 6401 to report changes because of a mistake in the tax liability previously reported on Form 730, Monthly Tax Return for Wagers. Interest is allowable. Input adjustment using TC 291 for tax decrease. The following information must be submitted with the claims:

    1. The facts involving the overpayment

    2. An explanation of the reason for claiming a refund

    3. The date of payment and the amount of the tax

    4. A statement whether any previous claim covering the amount involved, or any part, has been filed, if applicable.

    5. A statement that the taxpayer has not collected (whether as a separate charge or otherwise) the amount of the tax from the person who placed the wager on which the tax was imposed, has repaid the amount of the tax to the person who placed the wager, or has the written consent of the person who placed the wager to the making of the refund. The consent must be attached to the claim.

  5. If the overpayment relates to a laid-off wager accepted by the taxpayer, one of the above three statements in (4)(e) must be attached for both the person who placed the laid-off wager and the person who placed the original wager.

21.7.8.4.5.6.8  (01-01-2005)
Form 8849, Schedule 6, Claims Relating to Taxes Reported on Form 11-C

  1. Input an adjustment transaction on MFT 63 for the taxable period to which the claim relates, using TC 291 for a tax decrease.

  2. A claim may be filed for an overpayment of tax.

    • This is a claim for an overpayment of tax under IRC section 6401 to report changes because of a mistake in the tax liability previously reported on Form 11-C, Occupational Tax and Registration Return for Wagering.

    • Interest is allowable.

  3. There is no provision in the law to allow a refund for a portion of a year during which the person receives no taxable wagers.

21.7.8.4.5.6.9  (01-01-2007)
Form 8849, Schedule 6, Later Events That Give Rise to an Overpayment by Someone Other Than the Form 720 Taxpayer

  1. Input an adjustment transaction on MFT 03 for the quarter in which the claim is filed, using appropriate CRN.

  2. Taxpayer may file a Form 8849 claim. If claim is allowable, process claim using the following procedures:

    If Then
    There is no Form 720 posted to the quarter in which claim is filed. 1. Use entity information from claim to prepare a Form 720 tax return.
    2. Enter RCC "3" in red, unless interest is allowable.
    3. If taxpayer is not a Form 720 filer, code return as "final."
    4. Use received date of claim as received date of return.
    5. Enter claim amount as a negative amount on correct credit reference number line.
    6. Enter zero total tax on line 3 and claim amount on lines 4 and 10.
    7. Attach claim to return and send for processing.
    8. Retain a copy of return and claim.
    9. Monitor case to ensure return is processed correctly. If not, take appropriate action to correct.
    There is a Form 720 posted to the quarter in which claim is filed. 1. Input a TC 29X and TC 770.00, unless interest is allowable. (See subsections below for each type of claim.)
    2. Input appropriate CRN for amount of claim or excess credit allowance.
    3. Reduce IRS No. by amount of claim (excess credit allowance).

21.7.8.4.5.6.10  (10-01-2009)
Form 8849, Schedule 6, Tire Tax

  1. If the taxpayer does not report the tax tire credits on Form 720 Schedule C, the taxpayer can use Form 8849, Schedule 6, Other Claims, to claim the credits.

  2. The tire tax programming for compliance research is only available for an adjustment on the Form 720 tax module, MFT 03. See IRM 21.7.8.4.5.6.9, Form 8849, Schedule 6, Later Events That Give Rise to An Overpayment By Someone Other than the Form 720 Taxpayer, and follow the procedures in the table to input the tire tax adjustment on MFT 03. See IRM 21.7.8.4.1.4.7.1, Excise Tire Tax, for adjustment procedures.

21.7.8.4.5.6.11  (04-15-2015)
Form 8849, Schedule 6, Claims Relating to Taxes Reported on Form 2290

  1. A claim can be filed for the tax paid on a vehicle used on public highways 5,000 miles or less (7,500 for agricultural vehicles) during a prior taxable period (July 1 through June 30). The following items must be considered before allowing a mileage claim:

    • The mileage limitation applies to the total mileage a vehicle is used during a taxable period, regardless of the number of owners of the vehicle.

    • The claim must be made by the person that paid the tax to the government.

    • The claim may not be filed until after the end of that taxable period (after June 30).

    • Credit interest is not allowable.

    Input an allowable claim on MFT 60 with a TC 290 for zero, TC 770 for zero, and CRN 365 with the claim amount.

  2. A pro-rated claim for a credit may be filed for the tax paid on Form 2290 for a vehicle destroyed, stolen or sold before June 1 of the taxable period, and not used during the remainder of the taxable period. Input an allowable claim on MFT 60 with a TC 290 for zero and CRN 365 with the claim amount. Credit interest is allowable. See IRM 21.7.8.4.2.14.1, Form 2290, Vehicle Destroyed, Stolen, or Sold, for supporting documentation requirements and IRM 21.7.8.4.2.12.1, Privately Purchased Used Vehicles.

  3. A claim can be filed for an overpayment of tax. Input adjustment using TC 291 for a tax decrease on MFT 60.

    • This is a claim for an overpayment of tax under IRC section 6401 to report changes because of a mistake (reporting error) in the tax liability previously reported on Form 2290.

    • These claims are made by the person that paid the tax to the government.

    • Credit interest is allowable.

  4. A module credit balance of $10.00 or more will generate an L- Freeze Code. The module is frozen from refund or offset. The credit must be addressed to avoid future transcript generation. The freeze condition is released with one of the following actions:

    • TC 290 posts to the module.

    • Credit transfer (Doc Code 34/24) posts to the module.

    • Module balance becomes zero or debit.

    • TC 370 (Doc Code 51) posts to the module.

    See IRM 21.5.6.4.23, L- Freeze, and Document 6209, Master File Freeze Codes, Section 8A.4, for additional information.

21.7.8.4.5.6.12  (01-01-2007)
Form 8849, Schedule 6, Diesel Water Fuel Emulsion Blending

  1. The claim rate for undyed diesel fuel taxed at $.244 (CRN 310) and used to produce a diesel-water fuel emulsion is $.046 per gallon of diesel fuel (blender claims). The claim requirements are:

    1. Claim must be at least $750.00. See Form 8849, Schedule 6, instructions.

    2. Claim must be filed during the first quarter following the last quarter included in the claim. Only one claim may be filed per quarter.

    3. Claimant must attach a statement certifying the claimant produced a diesel-water fuel emulsion containing at least 14 percent water. The emulsion additive must be registered by a United States manufacturer under section 211 of the Clean Air Act with the Environmental Protection Agency.

    4. Claimant used undyed diesel fuel taxed at $.244 to produce the diesel-water fuel emulsion.

    5. Claimant sold or used the diesel-water fuel emulsion in its trade or business.

  2. Input adjustment on MFT 40, using TC 290 and CRN 310.

21.7.8.4.5.7  (10-01-2009)
Form 8849, Schedule 8, Registered Credit Card Issuers

  1. Schedule 8 is used by registered credit card issuers to make claims for sales of certain fuels for the exclusive use of a state or local government (taxable fuel), or for the exclusive use of a nonprofit educational organization (gasoline and aviation gasoline).

  2. The taxable fuel must have been purchased with a credit card issued to the state or local government or nonprofit educational organization by the credit card issuer making the claim. The credit card issuer must be registered with the IRS.

  3. If the taxable fuel is purchased without the use of a credit card issued by the credit card issuer to state or local government or nonprofit educational organization, or if the credit card issuer is not registered, the credit card issuer cannot make the claim.

  4. The following claim requirements must be met:

    1. Claim must be for taxable fuel sold during a period that is at least one week.

    2. The amount of the claim must be at least $200.00. (Amounts from lines 1 through 5 of Schedule 8 may be combined.)

    3. The claim must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim.

  5. The Schedule 8 is an interest bearing claim and may be filed electronically. See IRM 21.7.8.4.5.3 paragraphs (3) through (10) for interest bearing ultimate vendor claim procedures and manual refund requirements.

  6. Use the following category codes for Schedule 8 claims:

    • SC8P for paper-filed claims

    • SC8E for electronically-filed claims

21.7.8.4.6  (11-03-2011)
Fuel Compliance Penalties

  1. The Centralized Excise Operation receives all Fuel Compliance Penalty-related correspondence and claims. The penalty cases are routed to the appropriate fuel territory office for disposition.

  2. Fuel compliance penalties are the result of enforcement action taken by Fuel Compliance Agents (FCA) and Fuel Compliance Officers (FCO). These agents and officers are assigned to the Excise Fuel Territory East or Excise Fuel Territory West.

  3. A fuel compliance penalty is imposed as a civil penalty. The civil penalty assessment shows on IDRS as a TC 240 and will be under MFT 13 for business entities (BMF) or MFT 55 for individuals (IMF). The three-digit Penalty Reference Number (PRN) associated with the TC 240 identifies the penalty type and the function that assessed the penalty. The tax period is determined by the date of violation. For example: If a violation occurred on June 18, 2011, the tax period is 201106. Civil penalty tax modules will never post a TC 150. The penalty payment should post as a TC 640. A TC 670 without a TC 570 will refund back to the taxpayer.

  4. The following penalty reference numbers identify the fuel compliance penalties:

    PRN Type of Penalty IRC
    655 Refusal of Entry or Inspection 6717
    656 Dyed Fuel Sold for Use or Used in Taxable Use 6715
    657 Failure to Display Tax Registration 6718
    665 Mechanical Dye Injection Systems 6715A
    673 Resale of Adulterated Diesel Fuels 6720A
  5. Upon receipt of a fuel compliance penalty claim, reconsideration request, or Taxpayer Advocate Service (TAS) Operations Assistance Request (OAR), Centralized Excise will take the following steps:

    1. Review the case to determine the state of violation.

    2. Review Exhibit 21.7.8-1, Excise Fuel Territory State Listing, to determine the appropriate fuel territory (east or west).

    3. Send the case to the appropriate fuel territory point of contact.

    4. If TAS OAR, update status and location of case, per SLA, with TAS originator.

  6. Upon receipt of a fuel compliance penalty agreement form (i.e., Form 12010, Form 12011, Form 12012), Centralized Excise will take the following steps:

    1. Review IDRS to determine whether the penalty was assessed by a fuel territory office.

    2. If the penalty was assessed, associate the agreement with the controlling DLN.

    3. If the penalty was not assessed, send the case to the appropriate fuel territory (see paragraph 5 above) and provide a brief explanation of the referral.

21.7.8.4.7  (02-20-2013)
Specific Claims and Other Issues

  1. This section includes information and procedures for specific claims and other issues associated with excise taxes.

21.7.8.4.7.1  (02-20-2013)
Alcohol and Tobacco Tax and Trade Bureau (TTB) Returns and Correspondence

  1. Forward all Alcohol and Tobacco Tax and Trade Bureau (TTB) returns and correspondence to:

    Alcohol and Tobacco Tax and Trade Bureau, TTB
    Room 8002 Federal Office Bldg.
    550 Main Street
    Cincinnati, OH 45202

  2. The toll-free number for TTB is: 1-877-882-3277.

21.7.8.4.7.2  (02-20-2013)
American Taxpayer Relief Act (ATRA) of 2012 Retroactive Fuel Claims

  1. The American Taxpayer Relief Act of 2012 (Pub. L. 112-240) retroactively extended certain fuel tax credits that expired on 12/31/2011. The extended fuel credits are the biodiesel credit, biodiesel mixture credit, alternative fuel credit, and the alternative fuel mixture credit. These credits expired on 12/31/2013.

    Note:

    The due date for filing certain claims for payment related to biodiesel mixtures and alternative fuel had already passed by the ATRA enactment date. The Notice 2013–26 allowed these claims for payment to be filed by July 1, 2013. This notice does not affect the time for filing claims under section 34 (refundable income tax credits).

  2. Form 720X will be used to file retroactive claims for the calendar year 2012. Electronic filing (e-file) is not available for Form 720X.

21.7.8.4.7.2.1  (02-20-2013)
Biodiesel and Renewable Diesel Fuel Mixture Credit for Qualifying Sales and Uses During 2012

  1. If the taxpayer reported an excise tax liability for gasoline, diesel fuel, or kerosene (IRS Nos. 60, 104, 105, 107, 119, 35, 69, 77, 111, 62, and 14) on Form 720 during the first three quarters of 2012, they must amend the Form 720 to claim a credit against those liabilities. The amount of the credit may not exceed the total amount of those liabilities. Form 720X is used to amend the original filing.

  2. If the biodiesel and renewable diesel fuel mixture credit exceeds the amount that was reported on Form 720X, the excess credit may be claimed as an income tax credit on the 2012 federal income tax return by attaching a Form 4136.

  3. If the taxpayer reported an excise tax liability for gasoline, diesel fuel, or kerosene (IRS Nos. 60, 104, 105, 107, 119, 35, 69, 77, 111, 62, and 14) on Form 720 during the fourth quarter of 2012, they had the opportunity to report the credit on Schedule C, line 13. If the taxpayer was unable to report the credit on the fourth quarter original return, the taxpayer may file a claim using Form 720X, Form 8849, or Form 4136 in accordance with the rules and instructions.

  4. Biodiesel and biodiesel mixture claims, whether filed on Form 720, Form 8849, or Form 4136, must include Certificates for Biodiesel. Taxpayers that did not receive certificates during 2012 may make a belated producer request for 2012 certificates to meet the filing requirement. However, the IRS cannot require a producer to issue a certificate.

21.7.8.4.7.2.2  (02-20-2013)
Alternative Fuel Credit for Qualifying Sales and Uses During 2012

  1. The term alternative fuel generally includes:

    • Liquefied petroleum gas (LPG)

    • P Series Fuels

    • Compressed or liquefied natural gas

    • Liquefied hydrogen

    • Any liquid fuel which meets certain carbon recapture requirements and that is derived from coal (including peat) through the Fischer-Tropsch process

    • Compressed or liquefied gas derived from biomass

  2. If the taxpayer reported an excise tax liability for alternative fuel on Form 720 during the first three quarters of 2012, they must amend the Form 720 to claim a credit against those liabilities. The amount of the credit may not exceed the total amount of those liabilities. The Form 720X is used to amend the original filing.

  3. If the alternative fuel credit exceeds the amount that was reported on Form 720X, the excess credit may be claimed as an income tax credit on the 2012 federal income tax return by attaching a Form 4136.

  4. If the taxpayer reported an excise tax liability for alternative fuel (IRS Nos. 112, 118, 120, 121, 122, 123, 124, and 79) on Form 720 during the fourth quarter of 2012, they had the opportunity to report the credit on Schedule C, line 13. If the taxpayer was unable to report the credit on the fourth quarter original return, the taxpayer may file a claim using Form 720X, Form 8849, or Form 4136 in accordance with the rules and instructions.

  5. The taxpayer must be registered with an AL (alternative fuel) activity letter at the time the claim is filed for the alternative fuel credit. The taxpayer may use Form 637, Application for Registration (For Certain Excise Tax Activities), to obtain the appropriate registration.

21.7.8.4.7.2.3  (02-20-2013)
Alternative Fuel Mixture Credit for Qualifying Sales and Uses During 2012

  1. If the taxpayer reported an excise tax liability for gasoline, diesel fuel, or kerosene (IRS Nos. 60, 104, 105, 107, 119, 35, 69, 77, 111, 62, and 14) on Form 720 during the first three quarters of 2012, they must amend the Form 720 to claim a credit against those liabilities. The amount of the credit may not exceed the total amount of those liabilities. The Form 720X is used to amend the original filing.

  2. The taxpayer may claim the alternative fuel mixture credit only up to the amount of the tax liabilities for gasoline, diesel fuel, and kerosene (IRS Nos. 60, 104, 105, 107, 119, 35, 69, 77, 111, 62, and 14).

  3. The taxpayer may not claim any excess credit on an income tax return, Form 4136, or Form 8849.

  4. If the taxpayer reported an excise tax liability for gasoline, diesel fuel, or kerosene (IRS Nos. 60, 104, 105, 107, 119, 35, 69, 77, 111, 62, and 14) on Form 720 during the fourth quarter of 2012, they had the opportunity to report the credit on Schedule C, line 14. If the taxpayer was unable to report the credit on the fourth quarter original return, a Form 720X is required as indicated in (1) above.

  5. The taxpayer must be registered with an AM (alternative fuel mixture) activity letter at the time the claim is filed for the alternative fuel mixture credit. The taxpayer may use Form 637, Application for Registration (For Certain Excise Tax Activities), to obtain the appropriate registration.

21.7.8.4.7.3  (02-12-2015)
2014 One-Time Fuel Claims under IRC 6426 and IRC 6427

  1. The Tax Increase Prevention Act of 2014 (Pub. L. 113–295) extended the credits and payments allowable under IRC 6426(c), IRC 6426(d) IRC 6426(e), and IRC 6427(e) for biodiesel (including renewable diesel) mixtures, alternative fuels, and alternative fuel mixtures sold or used after December 31, 2013 and on or before December 31, 2014. In the case of any liquefied hydrogen mixtures, the credit expired on September 30, 2014. Notice 2015–3, Biodiesel and Alternative Fuels; Claims for 2014; Excise Tax, provides claim requirements for making a one-time claim for payment.

21.7.8.4.7.3.1  (10-01-2016)
Biodiesel and Alternative Fuel Incentives Claims

  1. The credits and payments allowable under IRC 6426(c), IRC 6426(d), and IRC 6427(e) for biodiesel (including renewable diesel) mixtures and alternative fuels sold or used during the calendar years 2014 or 2015 are collectively known as the biodiesel and alternative fuel incentives for years 2014 or 2015.

  2. Claimants must follow the procedures listed below to make a one-time claim related to the 2014 or 2015 biodiesel and alternative fuel incentives:

    • Claimants must submit claims on Form 8849, Claim for Refund of Excise Taxes.

    • Claimants must include Schedule 3 (Form 8849), Certain Fuel Mixtures and the Alternative Fuel Credit, with the submission and include the biodiesel and alternative fuel amounts on Line 2 and Line 3.

    • Claimants must claim all 2014 or 2015 biodiesel and alternative fuel incentives on a single Form 8849.

    • Claimants must mail the submission to the address provided in the Schedule 3 instructions.

    • Claimants may electronically file the Form 8849 and Schedule 3.

    • Claimants must be registered with an AL (alternative fuel) activity letter at the time the claim is filed for the alternative fuel credit under IRC 6426(d) and IRC 6427(e).

    • The 180-day claim period for 2014 biodiesel and alternative fuel incentives begins on February 9, 2015. Any claim submitted prior to February 9, 2015 will be considered filed on February 9, 2015. All claims must be filed on or before August 8, 2015. The IRS will not process claims post marked after August 8, 2015.

    • The 180-day period for 2015 biodiesel and alternative fuel incentives begins on February 8, 2016. Any claim submitted prior to February 8, 2016 will be considered filed on February 8, 2016. All claims must be filed on or before August 8, 2016. The IRS will not process claims postmarked after August 8, 2016.

    • Claims for 2016 biodiesel and alternative fuel incentives must be made in accordance with the normal rules for filing such claims.

  3. Interest Considerations - 2014 Biodiesel and Alternative Fuel Incentive Claim: No interest is allowed on a 2014 biodiesel and alternative fuel incentive claim when the overpayment is issued (date of refund check) within 60 days of the later of the:

    • Received date of the claim,

    • Processible date of the claim, or

    • February 9, 2015

    If the 60-day interest-free period is missed, interest is allowed from the latest of the preceding dates to the refund schedule date, less the applicable back-off period of IRC 6611(b)(2)

    Caution:

    Because the IRS computer does not calculate interest using the received date of a claim, interest must be manually computed and input with TC 770 when the interest-free period is missed.

    Example:

    A processible claim is filed on January 26, 2015. IRS has until April 10, 2015 (February 9 plus 60 days) to pay the claim without interest. After that date, the taxpayer is entitled to credit interest from February 9, 2015 (the earliest date the claim is considered as filed).

  4. Interest Considerations - 2015 Biodiesel and Alternative Fuel Incentive Claim: No interest is allowed on a 2015 biodiesel and alternative fuel incentive claim when the overpayment is issued (date of refund check) within 60 days of the later of the:

    • Received date of the claim,

    • Processible date of the claim, or

    • February 8, 2016

    If the 60-day interest free period is missed, interest is allowed from the latest of the preceding dates to the refund schedule date, less the applicable back-off period of IRC 6611(b)(2).

    Caution:

    Because the IRS computer does not calculate interest using the received date of a claim, interest must be manually computed and input with TC 770 when the interest-free period is missed.

    Example:

    A processible claim is filed on January 26, 2016. IRS has until April 8, 2016 (February 8 plus 60 days) to pay the claim without interest. After that date, the taxpayer is entitled to credit interest from February 8, 2016 (the earliest date the claim is considered as filed).

21.7.8.4.7.3.2  (04-05-2016)
2014 and 2015 Alternative Fuel Mixture Claim Under IRC 6426(e)

  1. For 2014 and 2015, all alternative fuel mixture credit claims allowed under IRC 6426(e), including claims for the fourth quarter, must be submitted on Form 720X, Amended Quarterly Federal Excise Tax Return.

  2. An alternative fuel mixture credit for any quarter may not exceed the IRC 4081 tax liability reported in the quarter for which the credit is being claimed.

  3. The claim period for the 2014 alternative fuel mixture credit begins on February 9, 2015. The claim period for the 2015 alternative fuel mixture credit begins on February 8, 2016.

  4. In general, claims for the IRC 6426(e) alternative fuel mixture credit must be made within three years from the time the return was filed or two years from the time the tax was paid, whichever is later.

  5. The taxpayer must be registered with an AM (alternative fuel mixture) activity letter at the time the claim is filed for credit.

Exhibit 21.7.8-1 
Excise Fuel Territory State Listing

East Fuel Territory West Fuel Territory
Alabama Alaska
Arkansas Arizona
Connecticut California
Delaware Colorado
Florida Hawaii
Georgia Idaho
Kentucky Illinois
Louisiana Indiana
Maine Iowa
Maryland Kansas
Massachusetts Michigan
Mississippi Minnesota
New Hampshire Missouri
New Jersey Montana
New York Nebraska
North Carolina Nevada
Pennsylvania New Mexico
Rhode Island North Dakota
South Carolina Ohio
Tennessee Oklahoma
Texas Oregon
Vermont South Dakota
Virginia Utah
West Virginia Washington
  Wisconsin
  Wyoming

More Internal Revenue Manual