4.24.1 Introduction to Excise Taxes

Manual Transmittal

February 07, 2019

Purpose

(1) This revises IRM 4.24.1, Excise Tax, Introduction to Excise Taxes.

Material Changes

(1) Editorial changes have been made when necessary throughout this IRM to update hyperlinks. Refer to the table below for a detailed list of changes made.

IRM Section Description of Change
4.24.1.1 Program Scope and Objectives Updated organizational name change.
4.24.1.1.4 Program Objectives and Review Updated organizational name change.
4.24.1.1.6 Related Resources Updated hyperlink.
4.24.1.6.2.1 Environmental Taxes Updated hyperlink.
4.24.1.6.2.2 Communications and Air Transportation Taxes Updated hyperlinks.
4.24.1.6.2.4 Retail Tax Updated hyperlink.
4.24.1.6.2.5 Ship Passenger Tax Updated hyperlink.
4.24.1.6.2.6 Other Excise Tax Updated hyperlink.
4.24.1.2.7 Foreign Insurance Taxes Updated hyperlink.
4.24.1.6.2.8 Manufacturers Tax Updated hyperlinks.
4.24.1.6.2.9 Patient Centered Outcomes Research Fee Updated hyperlink.
4.24.1.6.2.10 Indoor Tanning Services Updated hyperlink.
4.24.1.7 Medical Device Excise Tax Updated hyperlink.
4.24.1.8 Structured Settlement Factoring Transactions. Updated hyperlink.
4.24.1.9 Excise Taxes Reported on Form 2290, Form 11-C and Form 730 Updated hyperlinks.
Exhibit 4.24.1-1 Acronyms Updated acronyms,

Effect on Other Documents

This material supersedes IRM 4.24.1, dated July 24, 2018.

Audience

This section is for excise tax managers (excise managers), revenue agents and fuel compliance agents (excise examiners) and personnel at the Campus Exam/Automated Under Reporter Cincinnati (CEAC) who examine excise tax returns (excise returns), excise tax refunds (excise refunds) and excise tax claims (excise claims).

Effective Date

(02-07-2019)

Lisa M. Piehl
Acting Director, Examination - Specialty Policy
Small Business/Self Employed

Program Scope and Objectives

  1. General Overview - This IRM provides general information about basic excise examiner responsibilities, excise Internal Revenue Code (IRC) sections, excise IRM sections, materials about non-fuel excise tax abstracts (abstracts), primary excise returns and excise claims forms.

  2. Purpose - This IRM explains basic excise examiner responsibilities so that managers, senior-level officials and excise examiners who familiarize themselves with the information in this IRM will be better-equipped to prepare and submit accurate excise tax reports (excise reports), which is essential to increasing compliance.

  3. Audience - This IRM is for excise managers, excise examiners and personnel at CEAC who process excise returns, excise refunds and excise claims.

  4. Policy Owner - Director, Examination - Specialty Policy is responsible for the administration, procedures and updates related to the technical guidance and information processing steps and methods specific to basic excise examiner responsibilities, excise IRC sections, excise IRM sections, non-fuel abstracts, primary excise returns and excise claims forms.

  5. Program Owner - Director, Examination - Specialty Examination owns Excise Tax Examination.

  6. Primary Stakeholders - Appeals, Counsel, Field and Specialty Exam Quality (FSEQ), Large Business and International (LB&I) and Specialty Examination are the primary stakeholders for this IRM.

Background

  1. For compliance purposes, it is essential managers, senior management officials, excise examiners and personnel at CEAC know and understand basic excise examiner responsibilities, controlling excise IRC sections, excise IRM sections, non-fuel excise abstracts, primary excise return and claims forms so they will be better-equipped to prepare and submit accurate excise reports.

Authority

  1. The most significant statutes affecting excise taxes are dedicated to the associated trust funds or general revenue authorized by the applicable IRC Sections listed in the table below.

    Form Type of Excise Tax IRC Trust Fund
    720 Air Transportation of Persons and Property 4261-4263, 4271-4272, 4281-4282, 4291, 6672,7501 Airport and Airways Air Transportation
    720 Coal 4121 Black Lung Disability
    720 Communications 4251-4253, 4291, 6672,7501 General
    720 Ozone Depleting Chemicals 4681-4682 General
    720 Foreign Insurance 4371-4374 General
    720 Gas Guzzler 4064, 4221-4222 General
    720 Indoor Tanning 5000B General
    720 Inland Waterways 4042 Inland Waterways Trust
    720 Medical Device 4191 General
    720 Leaking Underground Storage Tank 4041, 4042, 4081 Leaking Underground Storage Tank
    720 Retail Truck 4051-4053, 4221-4222 Highway
    720 Ship Passenger 4471-4472 General
    720 Sports Fishing/Bows and Arrow Shafts 4161-4162, 4221-4222 Sport Fishing Restoration and Boating, Wildlife Restoration
    720 Taxable Fuel (gasoline, diesel fuel, kerosene) 4041, 4081, 4082, 6715 Highway, Airport and Airway
    720 Tires 4071-4073, 4221-4222 Highway
    720 Vaccines 4131-4132 Vaccine Injury Compensation
    720 Obligations not in Registered Form 103,149,163,4701 General
    720 Patients-Centered Outcomes Research Institute (fee) 4375-4377 Patients-Centered Outcomes Research Trust Fund
    8876 Structured Settlement Factoring 5891 General
    730 Wagering 4401-4405, 4411-4412, 4421-4424 General
    11-C Occupational Tax and Registration Return for Wagering 4411 General
    2290 Heavy Highway Vehicle Use 4481-4483 Highway

Roles and Responsibilities

  1. Director, Examination - Specialty Policy is the executive responsible for Excise Tax Exam policy and procedures.

  2. Director, Examination - Specialty Examination is the executive responsible for examination operational compliance.

  3. Chief, Estate & Gift Tax/Excise Tax Exam is responsible for ensuring general information is communicated to and carried out by excise examiners for basic excise examiner responsibilities, excise IRC sections, excise IRM sections, materials about non-fuel abstracts, primary excise returns and excise claims forms.

  4. The excise examiner is responsible for dealing directly with external customers (i.e., taxpayers and/or authorized representatives) and internal customers (i.e., employees from other Business Operating Divisions). The excise examiner must provide quality service and apply the law with integrity and fairness to all customers, as well as effectively communicate with the taxpayer and minimize taxpayer burden. The excise examiner should assist taxpayers in solving tax problem(s) identified, including referring taxpayers to the IRS function that can assist most appropriately in resolving the issue(s).

    1. Refer to IRM 4.10.1.3, Examination of Returns, Overview of Examiner Responsibilities, Communication, for information about the responsibilities excise examiners should understand and apply in the performance of their duties.

    2. Refer to IRM 4.24.6.5.3.2.1, Technical Guidance and Information Processing for Excise Tax Examination Issues, Processing Power of Attorney, for information about protocols to observe when a valid Form 2848 is on file.

    3. Refer to IRM 4.24.6.5.3.2.2, Form 8821 - Tax Information Authorization, for information about protocols to observe when a valid Form 8821 is on file.

    4. Refer to IRM 4.24.20.4.4.1, Excise Tax Reporting Guide, Excise Tax Enclosures with Correspondence to Representatives and Appointees, for guidance that describes excise examiner expectations when corresponding with authorized third parties.

    5. Refer to IRM 4.24.6.5.13, D 400 - Initial Taxpayer Contact Check Sheet, if a taxpayer has questions about current or past collection actions.

    6. Refer to IRM 13.1.7.2, Taxpayer Advocate Case Processing, Taxpayer Advocate Service (TAS) Case Criteria, TAS Case Criteria, for information about referrals to Taxpayer Advocate Service (TAS) when outlined criteria are satisfied.

Program Objectives and Review

  1. Program Goals - The information explained in this IRM provides a general framework describing basic excise examiner responsibilities, excise IRC sections, excise IRM sections, non-fuel excise abstracts, primary excise returns and claims forms. The proper application of this information will equip excise managers, excise examiners and personnel at CEAC who process excise returns, excise refunds and excise claims to prepare and submit accurate excise reports, thereby increasing compliance.

  2. Program Reports - Information reporting of program objectives are included on Program Manager Monthly Briefings provided to Director, Examination - Specialty Policy.

  3. Program Effectiveness - Program effectiveness is measured by the Exam Quality Review Staff, located in FSEQ. FSEQ supports the SB/SE Quality Improvement Program utilizing National Quality Review System to conduct independent case reviews from statistically valid samples of examination case work. National, area and territory trend analysis on the quality attributes are used to establish baselines to assess program performance, identify opportunities to improve work processes, analyze causes for failure, assess the feasibility of possible solutions and measure the success of quality improvement efforts.

  4. Annual Review - The Program Manager, Excise Tax Policy is responsible for ensuring applicable subsections of IRM 4.24 are current, comprehensive and accurate and the guidance provided promotes consistent tax administration.

Terms/Definitions/Acronyms

  1. Below are forms and terms frequently referenced throughout this IRM:

    • Form 720, Quarterly Federal Excise Tax Return

    • Form 8849, Claim for Refund of Excise Taxes

    • Form 2290, Heavy Highway Vehicle Use Tax

    • Abstract Number (ABS) - The IRS number on Form 720 that identifies the type of excise tax

  2. Refer to Exhibit 4.24.1-1 for acronyms and their definitions used throughout this IRM.

Related Resources

  1. Refer to IRM 4.24.4 , Excise Fuel Taxes Workload, Policies and Procedures, for information about fuel abstracts, fuel IRC sections, fuel IRM sections, primary fuel returns and fuel claims forms.

  2. Refer to IRM 4.24.8, Examination Guidance for Excise Claims for Refund or Abatement, for information about processing excise claims.

  3. IRS formally adopted a Taxpayer Bill of Rights in June 2014, which provides the nation’s taxpayers with a better understanding of their rights and helps reinforce the fairness of the tax system. In 2015, Congress charged the Commissioner with ensuring IRS employees are familiar with and act in accordance with taxpayer rights as afforded by the Code. IRC 7803(a)(3). IRS employees must be informed about taxpayer rights and be conscientious in the performance of their duties to honor, respect and effectively communicate those rights that may aid in reducing taxpayer burdens. IRS employees must administer the law with integrity and fairness and exercise professional judgment, not personal opinions, in conducting enforcement activities. Refer to Pub 1, Your Rights as a Taxpayer. Refer to IRM 4.24.18.2, Excise Case Selection, Fairness in Case Selection.

  4. The obligation to protect taxpayer privacy and to safeguard the information taxpayers entrust to our employees is a fundamental component of the IRS mission. Taxpayers have the right to expect the information they provide is safeguarded and used only in accordance with the law.

    • Refer to IRM 4.10.1.2.1.12, Unauthorized Access (UNAX).

    • Refer to IRM 4.11.57, Examining Officer’s Guide (EOG), Third Party Contacts.

    • Refer to IRM 25.23.1.3.2, Identity Protection and Victim Assistance, Identity Theft Victim Assistance (ITVA) - Program Responsibilities.

  5. Refer to Excise Tax Knowledge Base Homepage located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/landingview.aspx, for general guidance, procedures, the law and regulations on an extensive variety of excise issues.

Excise Tax Examination Considerations

  1. To deliver top quality customer service, the excise examiner should fully consider the examination scope, proper use of time and case file documentation.

Examination Scope

  1. Generally, the scope is indicated on the classification check sheet. The classification sheet is issued to the excise examiner in the Issue Management System (IMS) and an electronic file copy is maintained by Excise Case Selection - Workload Selection and Delivery.

  2. The scope of an excise examination should include other significant issues identified during the excise examination in addition to the original issue identified on the classification check sheet. Normally, the significant issue addressed on the classification check sheet should be addressed during the excise examination and documented in the workpapers.

  3. Whenever possible, the excise examiner should consult with the excise manager before raising new issues. Document the conversation on Form 9984, Examining Officer’s Activity Record.

  4. The excise examiner shall continually assess the facts and apply judgment to expand or contract the scope of the excise examination, as needed. Decisions shall be documented in the hard copy administrative file and IMS.

  5. The excise examiner must exercise judgment in determining the depth of the excise examination to help with estimating the time needed to complete it. The excise examiner should consider:

    1. Availability of evidence.

    2. Complexity of the issue.

    3. Materiality of the issue.

    4. Accuracy of books and records.

    5. Strength of internal controls.

    6. Applicability/appropriateness of Form 637 registrations.

Proper Use of Time

  1. The proper use of time is an essential element of a quality examination or compliance review. Excise examiners are responsible for the day-to-day management of cases assigned and are accountable for completing work efficiently and performing quality examinations or compliance reviews. Both the number of hours charged to a case and the span of time a case is open must be reasonable.

  2. Factors used to determine the reasonableness of time charged and the length of time a case is open are:

    1. Issue complexity and development.

    2. Condition of books and records.

    3. Taxpayer/representative cooperation.

  3. Timely actions by the excise examiner serve to reduce taxpayer burden.

  4. In-process cases are generally considered overage when they have been in status 12 (started) for 270 calendar days or more.

Case File Documentation

  1. It is mandatory the excise examiner, group manager and any other employee involved in the examination process, document all actions taken in the case file. These actions must be recorded on Form 9984, Examining Officer’s Activity Record.

  2. The following information must be recorded on Form 9984:

    1. Date of activity

    2. Location of activity

    3. Contact code

    4. Remarks/notes/actions taken

    5. Time charged for each activity

    6. Periods of inactivity, such as extended leave, training, and details

Excise Taxes - General Information

  1. Excise taxes are levied on a wide variety of goods, services and activities. The tax may be imposed at the time of sale by the manufacturer, sale by the retailer, or use (by the consumer). Many excise taxes are set aside into trust funds earmarked for related capital projects, such as highway and airport improvements. Excise taxes are independent of income taxes.

Purpose - Excise Tax IRM

  1. IRM 4.24 provides Servicewide instructions for all operating divisions with employees involved with the correct filing, reporting and payment of excise taxes. IRM 4.24 serves as the foundation for consistent administration of excise taxes by various IRS operating divisions. By providing one source of authority for all operating divisions, the IRS greatly reduces inconsistencies.

  2. IRM 4.24 controls with respect to guidance and procedures for excise tax issues is the primary source of authority for the administration of excise tax examinations by the IRS. It is used in coordination with other Examination IRMs. Other IRS functions may develop guidance as long as it:

    1. Remains consistent with the procedures set forth in IRM 4.24.

    2. Retains the philosophy of the excise tax policy statement.

    3. Is shared with the Director, Examination - Specialty Policy prior to distribution.

Excise Tax Returns and Claim Forms

  1. Excise tax returns and claims are filed and processed at CEAC using the forms listed below:

    • Form 720.

    • Form 720X, Amended Quarterly Federal Excise Tax Return. Refer to IRM 4.24.8.

    • Original and amended Form 720-TO, Terminal Operator Report, that are paper filings. Refer to IRM 4.24.17,Excise Summary Terminal Activity Reporting System (ExSTARS) Compliance Examination Procedures.

    • Original and amended Form 720-CS, Carrier Summary Report, that are paper filings. Refer to IRM 4.24.17.

    • Original and amended Form 730, Monthly Tax Return for Wagers.

    • Form 11-C, Occupational Tax and Registration Return for Wagering.

    • Original and amended Form 2290.

    • Form 8849, (consisting of seven schedules). Refer to IRM 4.24.8.

    • Form 637, Application for Registration (For Certain Excise Tax Activities). Refer to IRM 4.24.2, Form 637 Excise Tax Registrations.

    • Form 8876, Excise Tax on Structured Settlement Factoring Transactions. Refer to IRM 4.24.6.6.7, Excise Examinations Relating to Structured Settlement Factoring Transactions.

    • Form 6197, Gas Guzzler Tax.

    • Form 6627, Environmental Taxes.

    • Form 843, Claim for Refund and Request for Abatement, for all Dyed Diesel Fuel Penalty Claims. These claims are processed by the CSCC and forwarded to the appropriate excise territory manager. Refer to IRM 4.24.16.3,Excise Fuel Compliance Report Writing, Case Processing and Appeals Procedures, Claim for Refund of Fuel Compliance Penalties.

    Note:

    Form 4136, Credit for Federal Tax Paid on Fuels, Form 8864, Biodiesel and Renewable Diesel Fuels Credit, and Form 6478, Credit for Alcohol Used as Fuel, are collectively attached to an income tax return processed at the Submission Processing Center where the income tax return is filed.

Excise Taxes Reported on Form 720

  1. Form 720 is comprised of various sections. They are:

    • Part 1 consisting of excise taxes generally required to be deposited. Refer to IRM 20.1.4.10, Penalty Handbook, Failure to Deposit Penalty, Form 720 Reporting Requirements.

    • Part 2 consisting of excise taxes not required to be deposited.

    • Part 3 consisting of the lines for total tax, determining the balance due or overpayment.

    • Schedule A, Excise Tax Liability, which records the net tax liability for each semimonthly period in a quarter. Schedule A must be completed if there is an entry in Part 1.

    • Schedule T, Two-Party Exchange Information reporting, which reports gallons of taxable fuel received in a two-party exchange within a terminal. These gallons must also be included on the appropriate line on page 1 of Form 720 or delivered in a two-party exchange contemporaneous with a removal across the rack. Enter all gallons of fuel received or delivered in a two-party exchange within a terminal for the applicable fuel.

    • Schedule C, (Form 720) Claims, only if a liability is reported in Part 1 or Part 2.

  2. Refer to IRM 4.24.1.1.2 for a list of taxes, including associated IRC sections and trust funds.

  3. Refer to IRM 4.24.17 for information relating to Form 720-TO and Form 720-CS.

Electronic Federal Tax Payment System

  1. Most excise taxpayers are required to electronically deposit excise depository taxes using the Electronic Federal Tax Payment System (EFTPS). However, some excise taxpayers may remit excise tax payment due on Form 720 with the tax return. Refer to IRM 20.1.4.10.5, De Minimis Exception to Deposit Requirements Form 720, for more information. Otherwise, the payments must be paid through EFTPS. Refer to IRM 21.7.1.4.8.1, Business Tax Returns and Non-Master File Accounts, BMF/NMF Miscellaneous Information, Electronic Federal Tax Payment System (EFTPS).

  2. Refer taxpayer inquiries regarding EFTPS payments to the Centralized Specialty Tax Operations toll-free telephone number at 1-866-699-4096.

  3. Refer to the EFTPS web site at https://www.eftps.gov/eftps/ for more information.

Excise Taxes Reported on Form 720

  1. Excise taxes are distinguished in IRS systems by ABS, referred to as an "IRS No." on Form 720 for a particular excise tax. There are two major groups of excise taxes, fuel related and non-fuel related taxes. The non-fuel related abstract groups are discussed in this IRM.

Environmental Taxes
  1. Oil spill liability tax (ABS 18) applies generally to crude oil received at a United States refinery.

  2. The imported petroleum products oil spill tax (ABS 21) is imposed on petroleum products when they enter the U.S. for consumption, use, or warehousing.

  3. Ozone Depleting Chemicals (ODCs) tax (ABS 98) is imposed on an ODC, sold or used by the manufacturer, producer, or importer thereof. ODCs are certain chemicals listed in IRC 4682(a)(2).

  4. The tax on imported products (ABS 19) is imposed on an imported product containing or manufactured with ODCs, if it is entered into the U.S. for consumption, use or warehousing and is listed in Treasury Regulation 52.4682-3(f)(6).

  5. Refer to the Excise Tax Knowledge Base Homepage for environmental taxes located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/ozone%20depleting%20chemicals%20019%20020%20098.aspx.

Communications and Air Transportation Taxes
  1. Tax is imposed on amounts paid for communication services (ABS 22), which are defined as local telephone and teletypewriter exchange services.

  2. The tax is paid by the person paying for the service, ordinarily the subscriber or other telephone consumer. The tax must be paid to the telecommunications carrier rendering the service and which is responsible for collecting the tax and paying it over to the government.

  3. Refer to the Excise Tax Knowledge Base Homepage for communications tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/communications%20022.aspx.

  4. Tax is imposed on amounts paid for the transportation of persons by air (ABS 26), the transportation of property by air (ABS 28) and the use of international air travel facilities (ABS 27). Generally, the tax is paid by the person paying for the transportation and is collected and paid over to the government by the service entity receiving the payment.

  5. Refer to the Excise Tax Knowledge Base Homepage for air transportation taxes located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/air%20transportation.aspx.

  6. A fuel surcharge is imposed under IRC 4043 on any liquid consumed in a fractional program aircraft as fuel:

    • For the transportation of a qualified fractional owner with respect to the fractional ownership aircraft program of which such aircraft is a part, or

    • With respect to the use of such aircraft on account of such a qualified frational owner, including use in a deadhead service.

  7. Fractional ownership program flights are not taxable for transportation of persons or property by air under either IRC 4261 or IRC 4271. Instead, the fuel consumed in the flight is subject to a 14.1 cent per gallon surtax in addition to the noncommercial aviation fuel tax rate.

  8. The fuel surcharge is imposed on fuel used in flights that occur after March 31, 2012.

Fuel Taxes
  1. Refer to IRM 4.24.4 for information about fuel abstracts.

Retail Tax
  1. Tax is imposed on the sale price on the first retail sale of the following articles listed below (ABS 33), as well as related parts and accessories sold on or in connection with, or with the articles:

    1. Truck chassis and bodies, except truck chassis and bodies suitable for use with a vehicle with a gross vehicle weight (GVW) of 33,000 pounds or less.

    2. Trailer and semitrailer chassis and bodies, except trailer and semitrailer chassis and bodies suitable for use with a vehicle with a GVW of 26,000 pounds or less.

    3. Tractors of the kind used chiefly for highway transportation in combination with a trailer or semitrailer, except tractors that have a GVW of 19,500 pounds or less and a gross combined weight of 33,000 pounds or less.

  2. Refer to the Excise Tax Knowledge Base Homepage for retail tax on heavy vehicles located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/retail%20truck%20and%20trailer033.aspx.

Ship Passenger Tax
  1. Tax is imposed on commercial ship operators providing certain trips on vessels with accommodations for at least 17 passengers (ABS 29). The tax is based on the number of passengers transported during a quarter. Tax also applies to passengers on any commercial ship that transports passengers engaged in onboard gambling while the ship is outside U.S. territorial waters.

  2. Refer to the Excise Tax Knowledge Base Homepage for ship passenger tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/ship%20passenger%20029.aspx.

Other Excise Tax
  1. Tax is imposed on any person who issues certain registration-required obligations not in registered form (ABS 31).

  2. Refer to the Excise Tax Knowledge Base Homepage for obligations not in registered form located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/obligations%20not%20in%20registered%20form%20031.aspx.

Foreign Insurance Taxes
  1. Generally, tax is imposed under IRC 4371 on any premiums paid to insure a U.S. risk to a foreign insurer or reinsurer unless it is subject to a tax treaty that waives the tax. IRC 4373(1) (ABS 30).

  2. Refer to the Excise Tax Knowledge Base Homepage for foreign insurance taxes located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/foreign%20insurance%20030.aspx.

Manufacturers Tax
  1. Taxes are imposed on manufacturers (including a producer or importer) of certain items known as "taxable articles." Generally, tax attaches upon the sale of the taxable article and is based on the sales price of the item.

  2. Tax is imposed on the sale of both underground-mined (ABS 36 and 37) and surfaced-mined (ABS 38 and 39) coal. The tax is imposed on the producer of the coal.

  3. Refer to the Excise Tax Knowledge Base Homepage for coal taxes at located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/coal%20036%20037%20038%20039.aspx.

  4. Generally tax is imposed on the sale by the manufacturer or importer of tires of the type used on highway vehicles (ABS 108, 109, 113), if wholly or in part made of rubber. The tax rate is based on the load capacity of the tire.

  5. Refer to the Excise Tax Knowledge Base Homepage for tire tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/tires%20066%20108%20109%20113.aspx.

  6. Tax is imposed on the sale, use, or lease by the manufacturer or importer of an automobile of a model type that does not meet certain standards for fuel economy (ABS 40). Automobiles imported for business or personal use are subject to the tax.

  7. Refer to the Excise Tax Knowledge Base Homepage for gas guzzler tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/gas%20guzzler%20040.aspx.

  8. The tax is imposed on the sale, and on certain uses treated as sales, by the manufacturer or importer of each dose of a taxable vaccine listed in IRC 4132(a)(1) (ABS 97).

  9. Refer to the Excise Tax Knowledge Base Homepage for vaccine tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/vaccines%20097.aspx.

  10. Tax is imposed on the sale by the manufacturer, producer or importer of:

    1. Certain sport fishing equipment (ABS 41).

    2. Fishing rods and fishing poles (ABS 110).

    3. Electric outboard motors (ABS 42).

    4. Fishing tackle boxes (ABS 114).

    5. Bows, quivers, broadheads and arrow points (ABS 44).

    6. Arrow shafts (ABS 106).

  11. Refer to the Excise Tax Knowledge Base Homepage for sport fishing and archery tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/sport%20fishing%20041%20042%20110%20114.aspx.

Patient Centered Outcomes Research Fee
  1. A fee is imposed on the issuer of specified health insurance policies and the sponsors of an applicable self-insured health plan (ABS 133).

  2. The Patient Protection and Affordable Care Act of 2010 established IRC 5000B, a new section, related to this fee.

  3. Refer to the Excise Tax Knowledge Base Homepage for PCOR located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/patient%20centered%20outcomes%20research%20fee%20133.aspx.

Indoor Tanning Services
  1. The tax on indoor tanning services is 10% of the amount paid for the services (ABS 140). The tax is paid by the person paying for the services and is collected by the person receiving payment for the indoor tanning services.

  2. Refer to the Excise Tax Knowledge Base Homepage for indoor tanning tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/indoor%20tanning%20services%20140.aspx.

Inland Waterways Fuel Use Tax, Leaking Underground Storage Tank Tax on Inland Waterways Fuel Use, Section 40 Fuels and Biodiesel Sold But Not Used As Fuel
  1. Refer to IRM 4.24.4, Excise Fuel Taxes Workload, Policies and Procedures, for information about inland waterways fuel use tax (ABS 64), Leaking Underground Storage Tank (LUST) tax on inland waterways fuel use (ABS 125), Section 40 fuels (ABS 51) and biodiesel sold but not used as fuel (ABS 117).

Floor Stocks Tax
  1. A floor stocks tax (ABS 20) is imposed on ODCs held on January 1 by any person (other than the manufacturer or importer of the ODCs) for sale or for use in further manufacturing.

Medical Device Excise Tax

  1. Tax is imposed on the sale of any taxable medical device by the manufacturer, producer or importer (ABS 136).

    Note:

    H.R. 195 (Pub. L. 115-120), signed into law on January 22, 2018, extends for an additional two years the moratorium on the medical device excise tax imposed by IRC 4191 . Because of the moratorium, the medical device excise tax does not apply to the sale of taxable medical devices by the manufacturer, producer or importer of the device during the period beginning on January 1, 2016, and ending on December 31, 2019. Accordingly, the tax was removed from Form 720 reporting for those years.

  2. Refer to the Excise Tax Knowledge Base Homepage for MDET located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/medical%20devices%20136.aspx.

Structured Settlement Factoring Transactions

  1. A structured settlement factoring transaction is a transfer of structured settlement payment rights (including portions of structured settlement payments) made for consideration by means of sale, assignment, pledge, or other form of encumbrance or alienation for consideration. An excise tax is imposed on the factoring discount of certain structured settlement payments (ABS 34) and reported on Form 8876, Excise Tax on Structured Settlement Factoring Transactions.

  2. Refer to IRM 4.24.6.6.7, Excise Examinations Relating to Structured Settlement Factoring Transactions.

  3. Refer to the Excise Tax Knowledge Base Homepage for structured settlement factoring transactions located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/structured%20settlements%20034.aspx.

Excise Taxes Reported on Form 2290, Form 11-C and Form 730

  1. Form 2290 reports tax on the use of heavy highway motor vehicles (including semi-trailers and trailers) with a taxable gross weight of 55,000 pounds or more on public highways (ABS 196).

    1. Generally, the person liable for the tax is the person in whose name the vehicle is registered or required to be registered at the time of its first use on the public highway during the taxable period.

    2. Refer to IRM 21.7.8.4.2, Business Tax Returns and Non-Master File Accounts - Excise Taxes, Form 2290, Heavy Highway Vehicle Use Tax Return.

    3. Refer to the Excise Tax Knowledge Base Homepage for heavy highway vehicle use tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/highway%20use%20form%202290%20196.aspx.

  2. Form 730 reports the tax imposed on taxable wagers. Wagers are the total of those wagers that are authorized and those wagers that are not authorized by the State in which they are accepted (ABS 198).

  3. Form 11-C reports tax by principals or agents who accept taxable wagers and register certain information to pay the occupational tax (ABS 197).

  4. Refer to the Excise Tax Knowledge Base Homepage for wagering tax located at https://portal.ds.irsnet.gov/sites/vl037/lists/book6/wagering%20197%20198.aspx.

Acronyms

The following table contains the acronyms and their definitions used throughout this IRM.

Acronym Definition
ABS Abstract Number
CEAC Campus Exam/Automated Under Reporter Cincinnati
EFTPS Electronic Federal Tax Payment System
FSEQ Field and Specialty Exam Quality
GVW Gross Vehicle Weight
IGM Interim Guidance Memorandum
IRC Internal Revenue Code
LB&I Large Business & International
ODCs Ozone Depleting Chemicals
SB/SE Small Business / Self Employed
TAS Taxpayer Advocate Service
UNAX Unauthorized Access