4.24.2 Form 637 Excise Tax Registrations

Manual Transmittal

August 31, 2021

Purpose

(1) This transmits a revised IRM 4.24.2, Excise Tax, Introduction to Form 637, Excise Tax Application for Registration (for Certain Excise Tax Activities).

Material Changes

(1) Revised IRM 4.24.2 was restructured. Guidance was reorganized for clarity. Selected subsections were moved to new IRM 4.24.23, Operational Procedures and Responsibilities for Form 637 Excise Tax Registrations and Secure Airport Terminals (SATs), and new IRM 4.24.24, Form 637 Registration Files: Administrative Procedures for Initial Applications and Case Reviews. Refer to the table below for a detailed list of changes made.

IRM Subsection Description of Change
4.24.2.1 Program Scope and Objectives Modified guidance addressing Purpose. Added Fuel Compliance Officers (FCOs) to the category of excise examiners. Retitled Appeals to Independent Office of Appeals.
4.24.2.1.1 Background No change in guidance.
4.24.2.1.2 Authority Modified guidance that addresses IRC 4101, IRC 4041(a)(1), IRC 4081, IRC 40A(d)(1), IRC 6426(b)(4)(A), IRC 40(b)(6)(E), Treas. Reg. 48.4082-5, IRC 4222, IRC 4221 and Treas. Reg. 52.4682-5(d). Added guidance that addresses IRC 4681. Referred user to 4.24.23 and 4.24.24 for subsections moved from 4.24.2.
4.24.2.1.3 Roles and Responsibilities Retitled Program Manager, Excise Fuel Policy to Program Manager, Excise Tax Policy. Added Exam Technician and Management and Program Assistant to the Form 637 Registration Group. Retitled excise tax field groups to excise groups. Referred user to the subsections for guidance addressing Form 637 registration case work processed by the following areas:
  • Centralized Speciality Tax Operations (CSTO) to 4.24.23.5.

  • Excise Case Selection, Excise Workload Selection and Delivery (ECS/WSD) to 4.24.23.4.

  • Form 637 Registration Group to 4.24.23.6.

  • Excise Groups to 4.24.23.7.

4.24.2.1.4 Program Management and Reviews Modified guidance addressing Program Effectiveness so it appropriately describes the role of the Exam Quality Review Staff.
4.24.2.1.5 Terms and Definitions Deleted terms and definitions that were not applicable to 4.24.2 and moved them to 4.24.23 or 4.24.24 as appropriate.
4.24.2.1.6 Acronyms Added ASTM, which is a term that applies to 4.24.2. Deleted acronyms for terms that were not applicable to 4.24.2 and moved them to 4.24.23 or 4.24.24 as appropriate.
4.24.2.1.7 Related Resources Added guidance addressing IRC 4101, Treas. Reg. 48.4082-5, IRC 4222, IRC 4682 and IRC 6719. Modified guidance addressing the Taxpayer Bill of Rights (TBOR).
4.24.2.2 General Overview of Form 637 Registration Referred the user to 4.24.25.2 and 4.24.25.3 for information about Issue Management System (IMS) and Notebook respectively. Referred the user to 4.24.23.11 for information about mandatory administrative forms that apply for Form 637 case files. Moved prior guidance listing letters and publications from 4.24.2.2.(13) to 4.24.23.12.
4.24.2.2.1 Use of Fax Machine or Enterprise e-Fax (EEFAX) Removed subsection. Moved prior guidance to 4.24.23.2.
4.24.2.2.2 Initial Contact - Overview Removed subsection. Moved prior guidance to 4.24.23.3.
4.24.2.3 Disclosure Changed title to Applications Under IRC 4101. Moved guidance from 4.24.2.11.3. Modified descriptions so that they mirror Form 637 Activity Letters. Moved prior guidance to 4.24.2.10.
New 4.24.2.3.1 Added title Registration Tests for IRC 4101 Activities. Moved guidance from 4.24.2.11.3.1. Added guidance into 4.24.2.3.1(16)(e) from SB/SE 04-1220-0097, Reissuance of Obtaining Renewable Diesel Samples, dated December 2, 2020. The collection of eight one-ounce samples provides an adequate number of samples for lab testing.
New 4.24.2.3.2 Added title Visiting Applicants. Moved guidance from 4.24.2.11.3.2.
New 4.24.2.3.3 Added title Mandatory Revocation or Suspension Rules. Moved guidance from 4.24.2.11.3.3. Clarified that the excise examiner must recommend revocation or suspension for samples not meeting ASTM standards.
4.24.2.4 Taxpayer Advocate Service (TAS) Referrals and Inquiries Changed title to Applications Under IRC 4222 and IRC 4682. Moved guidance from 4.24.2.11.4. Modified descriptions so that they mirror Form 637 Activity Letters. Moved prior guidance to 4.24.2.11.
New 4.24.2.4.1 Added title Registration Tests for Activities Under IRC 4222 and IRC 4682. Moved guidance from 4.24.2.11.4.1.
New 4.24.2.4.2 Added title Visiting Applicants. Moved guidance from 4.24.2.11.4.2.
New 4.24.2.4.3 Added title Mandatory Revocation or Suspension Rules. Moved guidance from 4.24.2.11.4.3. Added revocation is required if it is necessary to protect the revenue or registrant fails to follow corrective actions for Notice CP 241.
4.24.2.5 Annual Registration Work Plan and Sample Criteria Changed title to Bonding. Moved guidance from 4.24.2.11.3.3 and 4.24.2.11.4.3. Added that bonding does not apply to throughputters, which are not position holders. Added that the bond must be forwarded to the Form 637 Registration Group manager within five days (rather than three) after approval. Moved prior guidance to 4.24.23.4.
4.24.2.6 Responsibility of Centralized Specialty Tax Operations (CSTO) Changed title to Penalty for Failure to Register or Reregister Under IRC 6719. Added guidance about when the penalty is applicable and how to assess. Moved prior guidance moved to 4.24.23.5.
New 4.24.2.6.1 Added title IRC 6719 No Penalty Case File Closing. Added guidance about how to close a No Penalty Case File.
New 4.24.2.6.2 Added title IRC 6719 Agreed Penalty Case File Closing. Added general guidance addressing an Agreed Penalty Case File.
New 4.24.2.6.3 Added title IRC 6719 Unagreed Penalty Case File Closing. Added guidance about how to close an Unagreed Case File.
4.24.2.7 Responsibility of 637 Registration Group Changed title to Changes in the Information Submitted in Connection with Application for Registration. Moved guidance from 4.24.2.15. Added guidance for excise examiners and TEs to upload Secretary of State documentation. Moved prior guidance to 4.24.23.6, 4.24.23.6.1, 4.24.23.6.2 and 4.24.23.6.3.
4.24.2.7.1 637 Registration Group Correspondence Reviews Changed title to Procedures for Changes in Ownership. Moved guidance from 4.24.2.15.1. Added guidance addressing IRC 4101(a)(5) for registration in the event of change in ownership. Moved prior guidance moved to 4.24.23.6.4.
New 4.24.2.7.2 Added title changed to Procedures for Name Changes. Guidance moved from 4.24.2.15.2.
New 4.24.2.7.3 Added title to Procedures for a Change in Registration Activities. Guidance moved from 4.24.2.15.3.
4.24.2.8 Overview of Excise Tax Field Groups’ Compliance Reviews Changed title to Relationship Between Form 637 Compliance Reviews and Examinations. Moved prior guidance to 4.24.23.7.
4.24.2.8.1 Excise Tax Field Group Manager Responsibilities and Procedures Removed subsection. Moved prior guidance to 4.24.23.7.1.
4.24.2.8.2 Excise Examiner Responsibilities and Compliance Review Procedures Removed subsection. Moved prior guidance to 4.24.23.7.2.
4.24.2.8.3 Excise Examiners Responsibilities and Excise Tax Examinations Conducted on Approved 637 Registrants Removed subsection. Moved prior guidance to 4.24.23.7.3.
4.24.2.8.4 Mandatory Administrative (Admin) Forms for Excise Examiners Removed subsection. Moved prior guidance to 4.24.23.11.
4.24.2.8.4.1 Form 13499-C Current 637 Recommendation Removed subsection. Moved prior guidance to 4.24.23.11.1.
4.24.2.8.4.2 New Applicant and Follow Up Information Document Request (IDR) Language Removed subsection. Moved prior guidance to 4.24.23.11.2.
4.24.2.8.4.3 IMS Examining Officer's Activity Record Removed subsection. Moved prior guidance to 4.24.23.11.3.
4.24.2.8.4.4 A605 Administrative Check Sheet Removed subsection. Moved prior guidance to 4.24.23.7.4.
4.24.2.8.4.5 A610 637 Registration Plan to Close Removed subsection. Moved prior guidance to 4.24.23.11.5.
4.24.2.8.4.6 A615 Initial Appointment Agenda Removed subsection. Moved prior guidance to 4.24.23.11.5.6.
4.24.2.8.4.7 A625 Initial Interview Questions and Notes Removed subsection. Moved prior guidance to 4.24.23.11.7.
4.24.2.8.4.8 B700 637 Filing Checksheet Removed subsection. Moved prior guidance to 4.24.23.7.8.
4.24.2.8.4.9 C800 637 Financial Analysis Removed subsection. Moved prior guidance to 4.24.23.11.7.9.
4.24.2.8.4.10 C805 Internal Controls Removed subsection. Moved prior guidance to 4.24.23.11.7.10.
4.24.2.8.4.11 D900 Initial Contact Check Sheet Removed subsection. Moved prior guidance to 4.24.23.11.7.11.
4.24.2.9 IMS Workflow Process and Case Status Definitions Changed title to Examinations Resulting from Form 637 Compliance Reviews. Guidance moved from 4.24.2.12. Clarified guidance that excise groups must establish ERCS controls. Moved prior guidance to 4.24.24.3.
4.24.2.10 637 Registration Group IMS 637 Registration Process Changed title to Disclosure. Guidance moved from 4.24.2.3. Moved prior guidance to 4.24.24.4.
4.24.2.10.1 Status 10 Pending -Assignment of 637 IMS Cases Queue Manager Q1 Removed subsection. Moved prior guidance to 4.24.24.4.1.
4.24.2.10.2 Status 15 Territory Assigned- IMS 637 Case Assignments by LT Removed subsection. Moved prior guidance to 4.24.24.4.2.
4.24.2.10.3 Status 20 Compliance Check - Overview Compliance Checks and Initial Compliance Reviews Conducted by the 637 Registration Group TE Removed subsection. Moved prior guidance to 4.24.24.4.3.
4.24.2.10.3.1 Status 20 - IDRS Compliance Check Procedures Removed subsection. Moved prior guidance to 4.24.24.4.3.1.
4.24.2.10.3.2 IMS Status 20 - Initial Compliance Review Procedures Specific to 637 Registration Group cases Removed subsection. Moved prior guidance to 4.24.24.4.3.2.
4.24.2.10.3.3 IMS Status 20 - Compliance Review Procedures Specific to Excise Tax Field Group Cases Removed subsection. Moved prior guidance to 4.24.24.4.3.
4.24.2.10.4 Status 30 LT Review - 637 Case Criteria. Removed subsection. Moved prior guidance to 4.24.24.4.4.
4.24.2.10.4.1 Status 30 - Procedures for 637 Registration Group Cases (TE Recommendation to Approve Application) Removed subsection. Moved prior guidance to 4.24.24.4.4.1.
4.24.2.10.4.2 Status 30 - Procedures for Excise Tax Field Group Cases Removed subsection. Moved prior guidance to 4.24.24.4.4.2.
4.24.2.10.5 Status 65 Q Manager Deny/Revoke/Suspend - Overview Removed subsection. Moved prior guidance to 4.24.24.4.5.
4.24.2.10.5.1 Status 65 - Action to Deny 637 Registration Group Cases Removed subsection. Moved prior guidance to 4.24.24.4.5.1.
4.24.2.10.5.2 Status 65- Denial Procedures for 637 Registration Group Cases Removed subsection. Moved prior guidance to 4.24.24.4.5.2.
4.24.2.10.5.3 Status 65- Procedures for Applications Denied with an Approved Registration Removed subsection. Moved prior guidance to 4.24.24.4.5.3.
4.24.2.10.6 Status 70 LT Review from Field- Procedures Relating to Excise Tax Field Group Recommendation to Approve, Continue, Deny, Revoke, or Suspend a Registration Removed subsection. Moved prior guidance to 4.24.24.4.6.
4.24.2.10.7 Status 80 Final Determination by LT- Procedures Removed subsection. Moved prior guidance to 4.24.24.4.7.
4.24.2.10.8 Status 85 Final Disposition by TE- Procedures Removed subsection. Moved prior guidance to 4.24.24.4.8.
4.24.2.11 Excise Tax Field Group Procedures - Initial Application Reviews Changed title to Taxpayer Advocate Service (TAS) Referrals and Inquiries. Guidance moved from 4.24.2.4. Moved prior guidance to 4.24.23.7.4.
4.24.2.11.1 Procedures Relating to Denials, Revocations and Suspensions of Registrations Removed subsection. Moved prior guidance to 4.24.23.8.
4.24.2.11.2 Follow-up Compliance Review Actions After Approval of Registration Removed subsection. Moved prior guidance to 4.24.23.7.5.
4.24.2.11.3 Applications under Section 4101 Removed subsection. Moved prior guidance to 4.24.2.5.
4.24.2.11.3.1 Registration Tests for Section 4101 Activities Removed subsection. Moved prior guidance to 4.24.2.5.1.
4.24.2.11.3.2, Visiting Applicants Removed subsection. Moved prior guidance to 4.24.2.5.2.
4.24.2.11.3.3 Bonds Removed subsection. Moved prior guidance to 4.24.2.7.1.
4.24.2.11.4 Applications under Sections 4222 and 4682 Removed subsection. Moved prior guidance to 4.24.2.6.
4.24.2.11.4.1 Registration Tests for Activities under Sections 4222 and 4682 Removed subsection. Moved prior guidance to 4.24.2.6.1.
4.24.2.11.4.2 Visiting Applicants Removed subsection. Moved prior guidance to 4.24.2.6.2.
4.24.2.11.4.3 Bonds Removed subsection. Moved prior guidance to 4.24.2.7.2.
4.24.2.11.5 Relationship Between Compliance Reviews and Examinations Removed subsection. Moved prior guidance to 4.24.2.10.
4.24.2.12 Examinations Resulting from 637 Compliance Reviews Changed title to Third Party Contacts. Added guidance to refer the user to 4.24.15.2.2 and Knowledge Management for information about third party contacts. Moved prior guidance to 4.24.2.9.
4.24.2.13 Creating, Maintaining and Updating 637 Registration Files Removed subsection. Moved prior guidance to 4.24.24.2.
4.24.2.14 Overview of Actions, Including Adverse Actions, Relating to Registrants Removed subsection. Moved prior guidance to 4.24.2.3.3 and 4.24.2.4.3.
4.24.2.14.1 Mandatory Revocation or Suspension Rules for Registrations Issued under IRC 4101 Removed subsection. Moved prior guidance to 4.24.2.3.3.
4.24.2.14.2 Mandatory Revocation or Suspension Rules for Registrations Issued under IRC 4222. Removed subsection. Moved prior guidance to 4.24.2.4.3.
4.24.2.15 Changes in the Information Submitted in Connection with Application for Registration Removed subsection. Moved prior guidance to 4.24.2.7.
4.24.2.15.1 Procedures for Changes in Ownership Removed subsection. Moved prior guidance to 4.24.2.7.1.
4.24.2.15.2 Procedures for Name Changes Removed subsection. Moved prior guidance to 4.24.2.7.2.
4.24.2.15.3 Procedures for a Change in Registration Activities Removed subsection. Moved prior guidance to 4.24.2.7.3.
4.24.2.16 Recording Time Charged to the 637 Registration Program Removed subsection. Moved prior guidance to 4.24.24.10.
4.24.2.17 Monitoring Registrants using Form 637 Indicator on Business Master File (BMF) Removed subsection. Moved prior guidance to 4.24.24.5.
4.24.2.17.1 Procedures to Post or Delete the Form 637 Indicator on BMF Removed subsection. Moved prior guidance to 4.24.24.5.1.
4.24.2.17.2 Notice CP 241 Procedures Removed subsection. Prior guidance moved to 4.24.24.5.2.
Exhibit 4.24.2-1 Form 637 IMS Data Screen Removed exhibit. Obsoleted redundant guidance.
Exhibit 4.24.2-2 Form 637 Program Letters Removed exhibit. Moved prior guidance to Exhibit 4.24.2-1.
Exhibit 4.24.2-3 IMS Workflow Status Codes Removed exhibit. Moved prior guidance to Exhibit 4.24.24-1.
Exhibit 4.24.2-4 Business Operations and Transactions Flow Removed exhibit. Moved prior guidance to Exhibit 4.24.23-1.
Exhibit 4.24.2-5 Financial Analysis Techniques Removed exhibit. Moved prior guidance to Exhibit 4.24.23-2.
Exhibit 4.24.2-6 Form 720 Filing, Deposit and Payment Requirements Removed exhibit. Obsoleted redundant guidance.

(2) Editorial changes have been made throughout this revision to reflect updated websites.

Effect on Other Documents

This IRM Section (section) supersedes IRM 4.24.2, Form 637, Excise Tax Registrations, dated July 17, 2018, SB/SE 04-0220-0002, Form 637, Initial Application Timeframes and Registration Indicators, dated February 21, 2020, SB/SE 04-0220-0003, Computer Paragraph (CP 241) Procedures for 637 Registrations, dated February 25, 2020, SB/SE 04-1020-0001, Approving, Continuing, Denying or Revoking Secure Area Terminal (SAT) Designations, dated October 5, 2020, and SB/SE 04-1220-0097, Reissuance of Obtaining Renewable Diesel Samples, dated December 2, 2020.

Audience

SB/SE Specialty Examination, Excise Tax Examination employees and personnel at the Centralized Specialty Tax Operations (CSTO).

Effective Date

(08-31-2021)

Kellie L. McCann
Acting Director, Examination - Specialty Policy
Small Business/Self Employed

Program Scope and Objectives

  1. Purpose - This section provides an overview of Form 637, Application for Registration (For Certain Excise Tax Activities).

  2. Audience - The audience for this section includes the SB/SE Director, Examination - Specialty, Chief, Estate & Gift/ Excise Tax, Form 637 Registration Group employees, Excise Territory Managers, Excise Group Managers (hereinafter referred to as "group managers" throughout this section), Excise Revenue Agents (RAs) and Fuel Compliance Agents (FCAs) and Fuel Compliance Officers (FCOs) (collectively and hereinafter referred to as "excise examiners" throughout this section).

  3. Policy Owner - Director, Examination - Specialty Policy is responsible for the administration, procedures and updates related to processing Form 637 applications and follow-up compliance reviews.

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

  5. Primary Stakeholders - Primary stakeholders include the Chief, Estate & Gift/Excise Tax, Excise Territory Managers, Form 637 Registration Group Manager, Excise Field Group Managers and Excise Case Selection (ECS).

  6. Other Stakeholders - Other areas that follow these policies and procedures include Independent Office of Appeals (Appeals), Agency Wide Shared Services, Counsel, SB/SE Examination, Large Business, International and Tax Exempt and Government Entities.

  7. Program Goals - The processes and procedures provided in this section are consistent with the objectives or goals for Excise Tax - Examination that are addressed in IRM 1.1.16.3.3.1, Organization and Staffing, Small Business and Self/Employed Division, Excise Tax Examination.

Background

  1. The Internal Revenue Code (IRC) requires each person who engages in certain activities subject to federal excise tax (FET) to be registered by the IRS as a taxpayer who engages in these activities. The taxpayer must register with the IRS before undertaking the activity. In other situations, a person must register with the IRS as a taxpayer who conducts certain activities to receive an excise tax benefit that may come with such activity, such as, buying or selling an article tax-free or filing a claim for refund or credit. The taxpayer must use Form 637 to apply for registration under IRC 4101, Registration and bond, IRC 4222, Registration, or IRC 4682, Definitions and special rules, for the specified activity.

  2. Form 637 includes a listing of activities for which registration is required or allowed. Refer to the tables found in new IRM 4.24.2.3, Applications under IRC 4101, and IRM 4.24.2.4, Applications under IRC 4222 and IRC 4682, that list all applicable activity letters.

  3. Letter 3689, Approval of Excise Tax Registration, is issued when an application is approved. A copy of the Form 637 application is not considered proof of registration. Letter 3689 should be retained as proof of registration.

  4. Letter 3689 does not constitute a determination letter. For example, an approval of an AB, NB or AL registration does not mean all future product produced unequivocally qualifies for the biodiesel mixture credit/alternative fuel mixture credit.

  5. If an application for registration is denied or an approved registration is revoked or suspended, then the applicant or registrant will be notified in writing and the reason for the denial, revocation or suspension will be provided.

  6. An approved registration remains valid until revoked or suspended. Registration status can be found at Confirm Online Form 637 Registration Status.

  7. All Form 637 registration numbers issued after February 1, 2004, are comprised of 10 digits. For registration numbers issued prior to the preceding date:

    1. The non-UV/UP registration number has eight digits.

    2. The activity letters UP and UV registration numbers are comprised of nine digits.

Authority

  1. Form 637 registrations are processed under the following authorities:

    • IRC 4101 - Registration and bond with respect to the tax imposed by IRC 4041(a)(1) , Tax on diesel fuel and kerosene in certain cases, or IRC 4081, Imposition of tax, every person producing or importing biodiesel (as defined in IRC 40A(d)(1), Biodiesel and renewable diesel used as fuel; biodiesel), or alcohol (as defined in IRC 6426(b)(4)(A), Credit for alcohol fuel, biodiesel, and alternative fuel mixtures: alcohol), and every person producing second generation biofuel (as defined in IRC 40(b)(6)(E), Alcohol, etc. used as fuel; second generation biodiesel).

    • Treas. Reg. 48.4082-5 - Registration relating to diesel fuel or kerosene removed, entered or sold in Alaska for ultimate sale or use in an exempt area of Alaska.

    • IRC 4222 - Registration for certain tax-free sales under IRC 4221, Certain tax-free sales.

    • Treas. Reg. 52.4682-5(d) - Exports; registration relating to the tax imposed, under IRC 4681, Imposition of tax, on ozone-depleting chemicals (ODC's) that are exported.

  2. Delegation Order SB/SE 1-23-7 (formerly SB/SE DO 4.36, Rev. 3), Approval, Denial, Suspension or Revocation of Form 637, Application for Registration (for Certain Excise Tax Activities), delegates the authorities for approving, denying, revoking and suspending Form 637 registrations.

  3. Delegation Order 4-6 (Rev. 1), Taxable Fuel Bond, delegates the authority to make the final determination as to the amount of bond required to be given by an applicant or existing registrant, to satisfy certain registration requirements under IRC 4101 with respect to the tax imposed by IRC 4041(a)(1) or IRC 4081. This delegation order also delegates the authority to require the posting of a bond to satisfy certain registration requirements under IRC 4101 for Form 637 registration and to set the value of such bond.

  4. This section is tailored for a general overview of Form 637 Registrations, including applications under IRC 4101, IRC 4222 and IRC 4682, as well as for general guidance. Refer to IRM 4.24.23, Operational Procedures and Responsibilities for Form 637 Excise Tax Registrations and Secure Airport Terminals (SATs), for guidance regarding operational procedures and responsibilities for Form 637 Registrations and SATs. Refer to IRM 4.24.24, Administrative Procedures for Initial Applications and Case Reviews, for guidance regarding Form 637 initial applications and case reviews.

Roles and Responsibilities

  1. Director, Examination - Specialty Policy is responsible for the procedures and policies addressed in this section.

  2. Program Manager, Excise Tax Policy is responsible for ensuring the procedures are accurate and updated regularly as needed.

  3. The Chief, Estate & Gift/Excise Tax is responsible for ensuring the procedures within this section are adhered to by employees in Excise Tax Examination.

  4. Form 637 registration case work is processed by the following areas:

    • Centralized Specialty Tax Operations (CSTO) - All initial Form 637 Applications are received by the Cincinnati IRS Center (CIRSC), date stamped and forwarded to CSTO for initial processing. Refer to IRM 4.24.23.5, Responsibility of Centralized Specialty Tax Operations.

    • Excise Case Selection, Excise Workload Selection and Delivery (WSD) - The selection of sample review cases and monitoring the Annual Form 637 Registration Work Plan is conducted by ECS/WSD. Refer to IRM 4.24.23.4, Responsibility of Excise Case Selection (ECS) and Workload Selection Delivery (WSD).

    • Form 637 Registration Group - The Form 637 Registration Group administers and maintains Form 637 Registrations. The Form 637 Registration Group consists of Lead Technicians (LTs), Tax Examiners (TEs), Exam Technician and Management and Program Assistant. Refer to IRM 4.24.23.6, Responsibility of the Form 637 Registration Group.

    • Excise Groups - Form 637 compliance reviews assigned to excise groups are conducted by excise examiners. Group managers are responsible for concurring with the excise examiner's compliance review recommendation and approving penalty determinations, if applicable. Refer to IRM 4.24.23.7, Role and Responsibilities for Excise Groups.

Program Management and Reviews

  1. Program Reports - Information regarding the reporting of program objectives are included on, but not limited to:

    • Examination Headquarters Monthly Briefing.

    • Program Manager Monthly Briefing.

    • SB/SE and Examination Operational Reviews and Business Performance Review.

  2. 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 (NQRS) to conduct independent Form 637 reviews from statistically valid samples of registration 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 of failure, assess the feasibility of possible solutions and measure the success of quality improvement efforts.

  3. Annual Review - Program Manager, Excise Tax Policy is responsible for reviewing annually the information in this section to ensure accuracy and promote consistent tax administration.

Terms and Definitions

  1. Below are definitions for terms frequently used throughout this section:

    Term Definition
    Applicant A person that has applied for registration on Form 637.
    Form 637 Form 637, Application for Registration (For Certain Excise Tax Activities), is used to apply for excise tax registration for activities under IRC 4101 , IRC 4222, and IRC 4682 .
    Letter of Registration Letter 3689 is issued when an application is approved for registration.
    Notice CP 241 Notice that is generated indicating a registrant may no longer meet the registration requirements and follow-up actions may be required.
    Registrant A person that has been issued a letter of registration (Letter 3689 ).

Acronyms

  1. Below are the acronyms and their definitions used throughout this section.

    Acronym Definition
    ASTM American Society for Testing and Materials
    CCP Centralized Case Processing
    CIRSC Cincinnati IRS Center
    CLA Case Level Activities
    CSTO Centralized Specialty Tax Operations
    EFL Excise Forensics Laboratory
    EIN Employer Identification Number
    ERCS Examination Returns Control System
    FCA Fuel Compliance Agents
    FCO Fuel Compliance Officers
    FET Federal Excise Tax
    IDRS Integrated Data Retrieval System
    IMS Issue Management System
    IRS Internal Revenue Service
    LB&I Large Business and International Division
    LT Lead Technician
    ODC Ozone Depleting Chemical
    TAS Taxpayer Advocate Service
    TE Tax Examiner

Related Resources

  1. Refer to IRM 4.24.4, Excise Fuel Taxes Workload, Policies and Procedures, for general information about basic excise examiner responsibilities, Excise IRM Sections, primary excise returns and excise claim forms and materials about fuel excise tax abstracts and issues.

  2. For tax law and regulations regarding Forms 637, refer to the following:

    • Applications under IRC 4101, Registration and bond, and Treas. Reg. 48.4082-5, Diesel fuel and kerosene; Alaska.

    • Applications under IRC 4222, Registration, and IRC 4682, Definitions and special rules.

    • Penalties for Failure to Register or Reregister under IRC 6719, Failure to register or reregister.

  3. Form 637 registration status can be located at Confirm On-line Form 637 Registration Status.

  4. For further guidance and procedures on a wide variety of excise issues, refer to Excise Tax Knowledge Base Home.

  5. The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. Refer to IRC 7803(a)(3), Commissioner of Internal Revenue; other officials, execution of duties in accord with taxpayer rights. For additional information about the TBOR, refer to Taxpayer Bill of Rights.

  6. For information relating to identity theft, refer to IRM 25.23, Special Topics, Identity Protection and Victim Assistance.

General Overview of Form 637 Registration

  1. An approved registration is a public statement by the IRS that it considered relevant aspects of the taxpayer’s business operations, financial condition and the taxpayer met all the required registration tests for the specified activity. Refer to IRM 4.24.2.3.1, Registration Tests for IRC 4101 Activities, and IRM 4.24.2.4.1, Registration Tests IRC 4222 and IRC 4682 Activities, for additional information on registration tests.

  2. Form 637 must be signed by a person with authority to bind the applicant. The authority to bind means the ability to execute a legally enforceable agreement that is enforceable against the applicant under state law.

  3. The following persons are required to register under IRC 4101(a), Registration:

    • Blenders: activity letter M.

    • Enterers, position holders, refiners and terminal operators: activity letter S.

    • Persons extending credit on certain exempt sales of taxable fuel: activity letter CC.

    • Pipeline operators or vessel operators within the bulk transfer/terminal system: activity letter X.

    • Producers and importers of agri-biodiesel: activity letter AB.

    • Producers and importers of alcohol: activity letter AF.

    • Producers and importers of biodiesel (other than agri-biodiesel) and renewable diesel: activity letter NB.

    • Producers of second generation biofuel and cellulosic biofuel: activity letter SB.

  4. Entities that have U.S. business transactions involving taxable fuel and other IRC 4101 activities are required to register, regardless of domicile. For example, a business located in a foreign country is required to register under IRC 4101, if it conducts U.S. business transactions involving taxable fuel or other IRC 4101 activities.

  5. The United States or a state or local government will not be registered for any activities under IRC 4222. If a governmental entity applies for a registration that is not required, then the application will be denied and the entity will be informed it is not required to be registered.

    Note:

    Under IRC 4101, a state or local government may register as appropriate under the statute.

  6. Each entity that has, or is required to have a separate EIN, is treated as a separate person and must apply for registration. Thus, two business units, such as a parent corporation and a subsidiary corporation, are two different persons and each requires a different EIN. Only the entity that engages in an activity that requires registration is required/allowed to register.

  7. All Form 637 registration files are processed and maintained electronically.

  8. The Issue Management System (IMS) is computer-based and manages the Form 637 case workload. IMS obtains and retains Form 637 workload information in a centralized location on the IMS server. For further guidance, refer to IRM 4.24.25.2, Issue Management System.

  9. The Notebook Job Aid is designed to provide excise examiners with a standard library of excise tax workpapers and letters. For further guidance, refer to IRM 4.24.25.3, Guide for Using Notebook.

  10. Excise examiners must utilize IMS and the appropriate mandatory administrative forms and Form 637 Activity Test Job Aids currently found in Notebook. Refer to IRM 4.24.23.11, Mandatory Administrative (Admin) Forms for Excise Examiners.

  11. All Form 637 IMS case files are to be adequately documented as follows:

    1. Form 637 Registration Group will document its case actions using the Form 637 IMS case file case level activity record (CLA).

    2. Excise examiners will document case actions using Form 637 IMS activity record or Form 9984, Examining Officer’s Activity Record.

    3. Group managers will document case actions using the Form 637 IMS case file CLA or Form 9984.

Applications Under IRC 4101

  1. Listed below is a table containing a description of the activities governed by IRC 4101, Treas. Reg. 48.4101-1(c) and (d), Taxable fuel; registration, and Treas. Reg. 48.4082-5:

    Activity Letter Description Applicable Registration Tests
    K Buyer of kerosene for a feedstock purpose.
    • Activity Test

    • Acceptable Risk Test

    • Adequate Security Test

    M Blender of gasoline, diesel fuel (including a diesel-water fuel emulsion), or kerosene, producing a taxable fuel outside the bulk transfer/terminal system, including blenders of alcohol fuel mixtures, alternative fuel mixtures, biodiesel mixtures and renewable diesel mixtures. Required to be registered.
    • Activity Test

    • Acceptable Risk Test

    • Adequate Security Test

    S Enterer, position holder, refiner, terminal operator, throughputter of gasoline, diesel fuel (including a diesel-water fuel emulsion), or kerosene, or an industrial user of gasoline. Each enterer, refiner, position holder, terminal operator and throughputter (that is a position holder) is required to be registered. If a throughputter is not a position holder, it is not required to register but, may register.
    • Activity Test

    • Acceptable Risk Test

    • Adequate Security Test

    X Pipeline Operator or Vessel Operator (including certain deep-draft vessels) within the bulk transfer/terminal system. Required to be registered.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    Y Buyer of kerosene for its use in commercial aviation (other than foreign trade). Registration is required to purchase kerosene tax free and self-assess by filing Form 720 using IRS No. 077, Kerosene for use in commercial aviation (other than foreign trade).
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    AB Producers and Importers of agri-biodesel. Required to be registered and provide fuel samples to be tested.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    AF Producers and Importers of alcohol. Required to be registered and provide fuel samples to be tested.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    AL Alternative Fueler that sells for use or uses alternative fuel as a fuel in a motor vehicle or motorboat.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    AM Alternative Fueler that produces an alternative fuel mixture that is sold for use or used in the alternative fueler’s trade or business.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    BC Qualified blood collector organization buying taxable fuel, taxable tires and certain heavy vehicles; claiming exemption from the communications tax and heavy highway vehicle use tax; or to claim a credit or payment of certain excise taxes, for its exclusive use in the collection, storage, or transportation of blood.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    CC Credit Card Issuer that issues credit cards for sales of taxable fuel to a state or local government for its exclusive use or for sales of gasoline to a nonprofit educational organization for its exclusive use. Must be registered at the time the sale takes place in order to file a claim.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    NB Producers and Importers of biodiesel (other than agri-biodiesel) and renewable diesel. Required to be registered and provide fuel samples to be tested.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    QR Qualified Retailer of diesel fuel or kerosene sold in Alaska for nontaxable uses.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    SB Producers of second generation biofuel. Required to be registered and provide fuel samples to be tested.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    UA Ultimate Vendor that sells kerosene for use in aviation.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    UB Ultimate Vendor that sells undyed diesel fuel or undyed kerosene for use in certain intercity and local buses.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    UP Ultimate Vendor that sells kerosene from a blocked pump. Must be registered to make an Ultimate Vendor (blocked pump) claim.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    UV Ultimate Vendor that sells (a) undyed diesel fuel or undyed kerosene to a state or local government for its exclusive use, or (b) gasoline (including aviation gasoline) to a state or local government for its exclusive use or to a nonprofit educational organization for its exclusive use. Must be registered to make an Ultimate Vendor claim.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

Registration Tests for IRC 4101 Activities

  1. Registration tests are defined in Treas. Reg. 48.4101-1(f). Different activity letters have different tests; some require all three tests are satisfied. The tests are:

    • Activity Test.

    • Acceptable Risk Test.

    • Adequate Security Test (Adequate Financial Resources and Satisfactory Tax History).

  2. Activity Test - Under Treas. Reg. 48.4101-1(f)(2), an applicant meets the activity test only if it is determined that it is, in the course of its trade or business, regularly engaged in the activity applied for or likely to be regularly engaged within a reasonable period of time after being registered. In determining whether an applicant is likely to be engaged in a listed activity, the following factors should be considered:

    • Business experience.

    • Financial standing.

    • Contracts with buyers and sellers of fuel.

    • Trade connections.

    • State licenses.

    • Federal and state tax returns.

  3. Acceptable Risk Test - Under Treas. Reg. 48.4101-1(f)(3), an applicant meets the acceptable risk test only if it is determined that neither the applicant nor a related person has been penalized for a wrongful act.

  4. Even though the applicant or a related person has been penalized for a wrongful act as defined under Treas Reg 48.4101-1(b)(4), the Chief, Estate & Gift/Excise Tax or delegate may determine, after review of evidence offered by the applicant, that the registration does not create a significant risk of nonpayment or late payment of the tax imposed by IRC 4041(a)(1) and IRC 4081.

  5. In determining whether an applicant creates a significant risk of nonpayment or late payment of tax, the following factors should be considered:

    • The time elapsed since the applicant or related person was penalized for a wrongful act.

    • The present relationship between the applicant and any related person that was penalized for any wrongful act.

    • The degree of rehabilitation of the person penalized for any wrongful act.

    • The amount of bond given by the applicant. In this regard, the amount of bond may be in any amount without limits.

      Note:

      Refer to IRM 4.24.2.5, Bonding, for information on bonds.

  6. Related person - Under Treas. Reg. 48.4101-1(b)(5), a related person, which includes officers, owners and members, is a person that meets any of the following conditions:

    1. Directly or indirectly exercises control over an activity of the applicant, if the activity is described in paragraph (c)(1) or (d) of Treas. Reg. 48.4101-1.

    2. Owns, directly or indirectly, five percent of more of the applicant.

    3. Is under a duty to assure the payment of a tax for which the applicant is responsible.

    4. Is a member with the applicant of a group of organizations (as defined in Treas. Reg. 1.52-1(b)), that would be treated as a group of trades or businesses for purposes of Treas. Reg. 1.52-1.

    5. Distributed or transferred assets to the applicant in a transaction in which the applicant’s basis is determined by reference to the basis of the assets in the hands of the distributor or transferor.

  7. Penalized by a Wrongful Act - Treas. Reg. 48.4101-1(b)(4) provides a person has been penalized for a wrongful act if any of the following are true:

    • Any penalty under Chapter 68 of the Code (or similar provision of the law of any state) has been assessed for fraudulently failing to file any return or pay any tax and the penalty has not been fully abated, refunded or credited.

    • Any penalty under Chapter 68 of the Code has not been fully abated, refunded or credited and the Chief, Estate & Gift/ Excise Tax determines that the conduct resulting in the penalty is part of a consistent pattern of failing to deposit, pay or pay over a substantial amount of tax.

    • A conviction of a crime under Chapter 75 of the Code (or similar revision of the law of any state), or conspiracy to commit such a crime occurred and the conviction has not been fully reversed by a court of competent jurisdiction.

    • A conviction of a crime, under the laws of the United States or any state, or of a felony for which an element of the offense is theft, fraud or the making of false statements occurred and the conviction has not been fully reversed by a court of competent jurisdiction.

    • Any tax under IRC 4103, Certain additional persons liable for tax where willful failure to pay, has been assessed and the tax has not been fully abated, refunded or credited.

    • The registration was revoked under IRC 4101 or IRC 4222.

  8. Adequate Security Test - Under Treas. Reg. 48.4101-1(f)(4), an applicant meets the adequate security test only if it is determined the applicant has both adequate financial resources and a satisfactory tax history or the applicant posts a bond under Treas. Reg 4041-1(j).

  9. Adequate Financial Resources - An applicant has adequate financial resources only if it is determined by the Chief, Estate & Gift/Excise Tax or delegate the applicant is financially capable of paying:

    • The expected tax liability under IRC 4041(a)(1) and IRC 4081 for a representative six month period.

    • In the case of a terminal operator, the expected tax liability under IRC 4081 of persons other than the terminal operator with respect to taxable fuel removed at the racks of its terminals during a representative one month period.

      Note:

      The determination that an applicant has adequate financial resources must be based on all information relevant to the applicant’s financial status. For example, lines of credit are generally revocable and, as such, should not be considered.

  10. Satisfactory Tax History - Under Treas. Reg. 48.4101-1(f)(4)(iii) an applicant has a satisfactory tax history only if the Chief, Estate & Gift/Excise Tax or delegate is satisfied with the filing, deposit and payment history for all federal taxes of the applicant and any related person. Complete transcripts or other equivalent research will be used for this purpose.

  11. An applicant will be registered for activities K, M or S only if the excise examiner determines that the applicant meets all three registration tests found in Treas. Reg. 48.4101-1(f).

  12. An applicant will be registered for activities as an X, Y, AB, AF, AL, AM, SB, CC, NB, QR, UA, UB, UP or UV only if the excise examiner determines that the applicant meets the Activity Test and the applicant and all related persons have a Satisfactory Tax History, including claim history.

  13. In addition to the registration tests, AB agri-biodiesel and NB biodiesel applicants must meet the requirements of IRC 40A(d)(1) that define biodiesel as the monoalkyl esters of long chain fatty acids derived from plant or animal matter, which must meet both of the following conditions:

    • The registration requirements for fuels and fuel additives established by the Environmental Protection Agency under Section 211 of the Clean Air Act (42 USC 7545).

    • The requirements of the American Society for Testing and Materials (ASTM) D6751.

  14. In addition to the registration tests, NB renewable diesel applicants must adhere to the requirements of IRC 40A(f)(3) that define renewable diesel as liquid fuel derived from biomass, which must meet both of the following conditions:

    • The registration requirements for fuels and fuel additives established by the Environmental Protection Agency under Section 211 of the Clean Air Act (42 USC 7545).

    • The requirements of ASTM D396 or D975.

  15. NB registrants that produce or import renewable diesel are also required to register under activity letter S to identify them as a refiner or enterer of a taxable fuel.

  16. In addition to the registration tests, the excise examiner must obtain samples to determine that agri-biodiesel, biodiesel or renewable diesel producer applicants and registrants (AB or NB applicants and registrants) are adhering to the applicable American Society for Testing and Materials (ASTM) requirements. For NB renewable diesel ASTM D396 or D975 requirements must be met. For AB and NB, applicants must also meet the requirements of IRC 40A(d)(1), which define biodiesel as the monoalkyl esters of long chain fatty acids derived from plant or animal matter, which meet the following:

    • The registration requirements for fuels and fuel additives established by the Environmental Protection Agency under Section 211 of the Clean Air Act (42 USC. 7545).

    • The requirements of the ASTM D6751 for biodiesel.

  17. Samples of agri-biodiesel, biodiesel and renewable diesel produced or imported are required for testing for ASTM standards. FCOs or FCAs, if available, should obtain the samples from the producer/importer applicant during the initial registration process and in follow-up compliance reviews. There may be instances when an FCO/FCA is not readily available. For these situations, an excise examiner may allow an applicant, registrant or designated proxy to collect and ship samples to the Excise Forensics Laboratory (EFL). The collection and shipping of samples without an FCO/FCA may occur under the following circumstances and procedures:

    1. The excise examiner requests FCO/FCA support through his or her group manager. If an FCO/FCA is not available to obtain the sample, then the group manager will direct an FCA in the group to send the necessary sampling and shipping supplies to the excise examiner. The supplies include sample bottles and caps, Form 9667, Sample Bottle Seals and Identification Labels, and shipping supplies with instructions.

    2. The excise examiner should contact the designated Excise Tax Policy Analyst for fuel to obtain a shipping air bill and provide the expected shipping date the samples will be obtained. Excise Tax Policy must be notified immediately if the date changes.

    3. The excise examiner must review IRM 4.24.15, Excise Fuel Compliance Inspection, Sampling and Shipping, to become familiar with the safety, sampling and shipping aspects of handling fuel.

    4. The excise examiner should schedule an appointment to observe the collection of the samples.

      Note:

      The taxpayer's designation of a proxy requires a valid Form 2848, Power of Attorney and Declaration of Representative, and Form 56, Notice Concerning Fiduciary Relationship, from the applicant prior to sample collection activity.

    5. At the time of the appointment, the excise examiner will observe the applicant or registrant fill eight one-ounce production run samples (fill to the one ounce line on each sample bottle) for each tank product to be tested.

      Note:

      The applicant or registrant generally provides equipment but the excise examiner should inquire about safety requirements prior to the visit.

    6. The excise examiner shall complete Form 9667 in the presence of the applicant or registrant.

    7. The applicant or registrant places the two security strips and label from the Form 9667 onto each bottle. Each Form 9667 can label four sample bottles of the same product from the same tank. The Form 9667 also has a label that may be included in the case file.

    8. Crisscross the top two narrow labeling strips over the top of the capped bottle so that four approximately equal lengths come down the outside of the bottle.

      Note:

      Carefully press these strips against the side of the cap while one end of the strip is still not applied to the bottle.

      Wrap the third section, which is identified as "Bottle Label" on Form 9667 around the bottle, covering the bottom ends of the two crisscrossed strips.

    9. The excise examiner shall prepare Form 13927, Chain of Custody and Shipping Record, The completed form will be enclosed inside the shipping box.

    10. The applicant or registrant ships the samples to EFL the day of the visit unless the daily courier pickup deadline has passed. If the deadline has passed, then the sample must be shipped the next day. Fuel Policy will inform the excise examiner of the shipping deadline prior to the visit. The excise examiner must ensure that the shipping box is sealed prior to leaving the sampling site.

    11. The excise examiner shall complete Form 14403, Investigative Sample Information, and either fax or e-mail the completed form to the EFL.

    12. The EFL will send the sample results to the individual(s) listed on Form 14403.

  18. Approval or Continuation of registration for AB or NB will be granted only if the results from the lab test for the agri-biodiesel, biodiesel and/or renewable diesel samples submitted by the applicant or registrant meet the IRC requirements.

  19. A "Y" registration is necessary for an aircraft operator to self-assess excise tax on Abstract 077.

    Note:

    The "Y" registrant must provide the seller with a written exemption certificate (Model Certificate K).

  20. Use of fuel in foreign trade. A buyer of aviation-grade kerosene fuel for use in foreign trade does not need to be registered to buy aviation fuel tax-free for that purpose. Refer to Section 4(f) of Notice 05-04.

  21. An aircraft operator/ultimate purchaser does not need to be a "Y" registrant in order for a registered ultimate vendor ("UA" registrant) to make a claim for kerosene sold for use in commercial aviation. The aircraft operator/ultimate purchaser can provide model Waiver L to an "UA" registrant without having a "Y" registration.

  22. The requirement that each commercial aircraft operator have a "Y" registration was removed by Notice 05-80 Section 3(d).

  23. Specific rule for qualified fuel sales in Alaska. Treas. Reg. 48.4082-5(b) provides that the Chief, Estate & Gift/Excise Tax or delegate will register a person as a Qualified Retailer (QR) only if both of the following requirements are met:

    • If it is determined that the person, in the course of its trade or business, regularly sells diesel fuel or kerosene for use by its buyer in a nontaxable use.

    • If the person has satisfied the filing, deposit, payment, and claim history for all federal taxes of the person and any related person.

      Note:

      Treas. Reg. 48.4101-1 does not address Qualified Retailers. Treas. Reg. 48.4082-5(f) provides that each person that has been registered as a Qualified Retailer, the rules of Treas. Reg. 48.4101-1(g), (h) and (i) apply.

Visiting Applicants

  1. It is required that an onsite visit be conducted at the principal business location and/or production facility of the applicant for activities K, M, S, X, AB, AF, NB and SB.

  2. An onsite visit by an excise examiner may be warranted to the principal business location of the applicant for activities AL, AM, BC, CC UA, UB, UP, UV and Y.

  3. An onsite visit by an excise examiner is not required for activity QR.

Mandatory Revocation or Suspension Rules

  1. The Chief, Estate & Gift/Excise Tax must revoke or temporarily suspend the registration for activities above, if it is determined at any time the registrant:

    • Does not meet one or more of the applicable registration tests described in Treas. Reg. 48.4101-1(f) and has not corrected the deficiency within a reasonable period of time after notification.

    • Has used its registration to evade, or attempt to evade, the payment of any tax imposed by IRC 4041(a)(1) or IRC 4081, or to postpone or in any manner to interfere with the collection of any such tax.

    • Has used the registration to make a fraudulent claim for a credit or payment.

    • Has aided or abetted another person in evading, or attempting to evade, payment of any tax imposed by IRC 4041(a)(1) or IRC 4081, or in making a fraudulent claim for credit or payment.

    • Has sold, leased, or otherwise allowed another person to use the registration.

    • Fails to follow corrective actions for Notice CP 241. Refer to IRM 4.24.24.5.2, Notice CP 241 Procedures, for more information.

  2. The excise examiner must recommend revoking or suspending the registration of any person registered for activities AB and/or NB, if it is determined the results of samples obtained during a compliance review do not meet ASTM standards and/or do not meet the requirements of IRC 40A (d)(1), Biodiesel and renewable diesel used as fuel.

Applications Under IRC 4222 and IRC 4682

  1. The description of the activities governed by IRC 4222, Treas. Reg. 48.4222(a)-1 and Treas. Reg. 52.4682-5(d) are listed in the table below.

  2. These activities are A, B, C, D, E, F, I, Q and V.

    Activity Letter Description Applicable Registration Tests
    A Manufacturer of gas guzzler automobiles, sport fishing equipment (including fishing rods and fishing poles), fishing tackle boxes, bows, quivers, broadheads, points, arrow shafts, taxable tires or vaccines.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    B Buyer of sport fishing equipment (including fishing rods and fishing poles), fishing tackle boxes, gas guzzler automobiles, bows, quivers, broadheads, points or vaccines for further manufacture or for resale to a buyer for further manufacture.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    C Buyer of tires for use on or in connection with the sale of another article the buyer manufacturers and sells (1) for export, (2) to state and local governments, (3) to nonprofit educational organizations, or (4) as supplies for vessels or aircraft.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    D Buyer with a place of business in the United States purchasing vaccines, gas guzzler automobiles, taxable tires, sport fishing equipment (including fishing rods and fishing poles), fishing tackle boxes, bows, quivers, broadheads, points, or arrow shafts, for export or for resale to a second purchaser for export.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    E Buyer (other than state or local government) of gas guzzler automobiles for ambulance, law enforcement, or fire fighting.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    F Nonprofit educational organization, other than a public school, buying taxable tires, certain heavy vehicles, sport fishing equipment, (including fishing rods and fishing poles), fishing tackle boxes, bows, quivers, broad heads, points or arrow shafts for its exclusive use.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    I Buyer (other than nonprofit educational organization or state or local government) of taxable tires for use on certain intercity, local or school buses.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    Q First retail seller of certain heavy vehicles. Heavy vehicle retailers that make a tax-free sale listed under IRC 4221(a) must be registered prior to making such a tax-free sale.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

    V Manufacturer, importer, or buyer of ozone-depleting chemicals (ODCs) for export.
    • Activity Test

    • Adequate Security Test (only the Satisfactory Tax History)

Registration Tests for Activities Under IRC 4222 and IRC 4682

  1. Applicants will be registered under IRC 4222 and IRC 4682, if they meet the following tests:

    • Activity test.

    • Satisfactory tax history.

  2. The activity test for activities A, Q or V will be met only if it is determined the applicant or registrant in the course of its trade or business, regularly engaged in making certain tax-free sales described under IRC 4221 for activities A or Q or IRC 4682(d) for activity V, or is likely to be regularly engaged in making certain tax-free sales because of such factors as the applicant’s business experience, financial standing or trade connections.

  3. The activity test for activities B, C, D, E, F or I will be met only if it is determined the applicant in the course of its trade or business, regularly engaged in purchasing taxable articles under Chapter 32, Manufacturer’s Excise Taxes, other than under IRC 4121, or IRC 4081, or under Subchapter C of Chapter 31 or is likely to be regularly engaged in these activities because of such factors as the applicant’s business experience, financial standing or trade connections.

  4. The satisfactory tax history test will be met only if, the Chief, Estate & Gift/Excise Tax or delegate is satisfied with the filing, deposit, payment, reporting and claim history for all federal taxes of the applicant or registrant and any related person.

Visiting Applicants

  1. A field visit by an excise examiner may be warranted to the principal business location of applicants for activities A, B, C, D, E, F, I, Q and V.

Mandatory Revocation or Suspension Rules

  1. Per Treas. Reg. 48.4222(c)-1, the excise examiner is authorized to recommend revoking or temporarily suspending the registration of any person registered for activities above, if it is determined that such registrant:

    • Is not a bona fide manufacturer, or a purchaser reselling direct to manufacturers or exporters.

    • Is for some other reason not eligible under these regulations to retain a Certificate of Registry.

    • Is necessary to protect the revenue or the registrant.

    • Has used this registration to avoid the payment of any tax imposed by Chapter 32 of the Code, or to postpone or interfere in any manner with the collection of such tax.

    • For A, B, C, D, E, F, I and Q registrants, the registrant failed to comply with the requirement of paragraph (c) of Treas. Reg. 48.4221(a)-1, relating to the evidence required to support tax-free sales.

      Note:

      If any registrant fails to follow corrective actions for Notice CP 241, then the excise examiner is authorized to recommend revoking or temporarily suspending the registration. Refer to IRM 4.24.24.5.2, Notice CP 241 Procedures, for more information.

  2. For V registrants, the excise examiner may recommend revoking or temporarily suspending a registration, if it is determined the registrant failed to comply with Treas. Reg. 52.4682-5(d) and (e).

Bonding

  1. Bonding applies to applications/registrations under IRC 4101. Bonding does not apply to applications under IRC 4222 and IRC 4682.

  2. IRC 4101(b)(1) and Treas. Reg. 48.4101-1(j), as a condition of permitting any person to be registered under IRC 4101(a), the Chief, Estate & Gift/Excise Tax may require such person to give a bond and, as appropriate, agree to a lien on their property as a condition of registration. Persons who fail to meet the acceptable risk test or the adequate security test may post a bond as a condition of registration.

  3. A bond may be required as a condition for issuance of a registration, as well as the continuation of a registration. The excise examiner must discuss bonding with the group manager.

  4. Bonds are relevant in two situations:

    • Initial registration applications for activity letter K, S or M.

    • Remedial action for registrants who are not UA, UB, UP or UV, if the Chief, Estate & Gift/Excise Tax determines that a registrant has, at any time failed to comply with the terms and conditions of registration, made a false statement in connection with its application for registration or retention of registration or used its registration in a manner that creates a significant risk of nonpayment or late payment of tax.

  5. The excise examiner may consider a bond as a factor in determining the acceptable risk test and adequate security test. Refer to Treas. Reg. 48.4101-1(f)(3)(ii)(D) and Treas. Reg. 48.4101-1(f)(4)(ii) and (iii), respectively.

  6. A bond is not required for an S registrant that is a throughputter but not a position holder.

    Note:

    Throughputters that are not position holders have no expected tax liability under IRC 4041(a)(1) and IRC 4081.

  7. Amount of bond - The group manager will set the value of the bond. The bond must be in an amount that is determined to ensure timely collection of taxes imposed under IRC 4041(a)(1) and IRC 4081 taking into account the applicant’s financial capabilities, tax history and expected tax liability. Refer to Treas. Reg. 48.4101-1(j)(2).

    • If the applicant has a significant risk of nonpayment or late payment of tax, then the amount of the bond does not have limits in order to comply with the acceptable risk test.

    • The person’s financial capabilities, tax history and expected tax liabilities under IRC 4041(a)(1) and IRC 4081 are taken into account when determining the amount of the bond in order to comply with the adequate security test.

      Note:

      In no case may the amount of the bond be greater than the amount of the person’s expected tax liability under IRC 4041(a)(1) and IRC 4081 for a representative six month period.

      Note:

      For a terminal operator, the amount of the bond may not be greater than the expected liability of persons other than the terminal operator with respect to taxable fuel removed at the racks of its terminals during a representative one month period.

  8. Types of Bonds - Under Treas. Reg. 48.4101-1(j)(1), the following types of bonds may be accepted:

    • A public debt obligation of the United States Government.

    • An obligation the principal and interest of which are unconditionally guaranteed by the United States Government.

    • A bond executed by a surety company listed in Department of the Treasury Circular 570, Companies Holding Certificates of Authority as Acceptable Securities on Federal Bonds, etc., as an acceptable surety or reinsurer of federal bonds. Department of the Treasury Circular 570, may be found at List of Certified Companies and is usually printed each year in the July 1 edition of the Federal Register.

    • Any other bond with security including liens under IRC 4101(b)(1)(B) considered acceptable by the Chief, Estate & Gift/ Excise Tax.

    • Refer to Treas. Reg. 301.7101-1, Form of bond and security required, for additional information.

  9. Procedures for Surety Bonds - Persons required to furnish a bond shall execute such bond on Form 928, Taxable Fuel Bond, by an acceptable surety. The group manager will ensure the accuracy of the bond, i.e., that the bond is payable to the United States Treasury and is not revocable by the taxpayer without prior notification by the surety company to the Chief, Estate & Gift/Excise Tax.

    Note:

    All bonds must have original signatures and raised seals.

  10. The group manager should consider the following items when securing a bond:

    • Treasury Department Circular No. 570 periodically lists the companies certified by the Secretary of the Treasury as acceptable sureties on Federal bonds. This list also shows the areas in which the companies are licensed to transact business and the underwriting limitations applicable to each company.

    • A bond executed by surety not holding a certificate of authority approved by the Secretary of the Treasury shall be accompanied by financial statements of the surety or sureties. The taxpayer’s proposal to pay will be submitted with the bond.

    • Bonds or notes that are not in the public debt obligations of the United States must be unconditionally guaranteed by the United States as to both interest and principal.

  11. Bond Approval - The group manager shall forward the bond to the territory manager who makes the final determination on the bond and signs Form 928 . Upon final approval of the bond, the applicant’s or registrant’s registration will be approved or continued.

  12. Bond Maintenance - When a bond is secured, the following procedures apply:

    1. The bond should be forwarded to the Form 637 Registration Group manager within five business days after final approval by the territory manager.

      Note:

      For Form 637 Registration Group Contacts, refer to the Excise Tax Knowledge Base Home, Form 637 Registration Shelf, Registration Information Book, Other Related Resources at Form 637 Registration Group Contact Information.

    2. A copy of the signed bond must be uploaded into the registrant's Form 637 IMS case file.

    3. The bond must be indicated on IMS. Under the Form 637 Recommendation Screen, the excise examiner should select the "Bond Indicator" as a part of his or her recommendation. The excise examiner must also notate the amount of the bond, the bond number and the date bond was secured.

  13. Collection of Taxes from Bonds - If a bonded registrant does not pay the amount of tax it incurs under IRC 4041(a)(1) and IRC 4081 by the time prescribed in IRC 6151, Time and place for paying tax shown on returns, for paying that tax, then the IRS may collect the amount of the unpaid tax (including penalties and interest with respect to that tax) from the bonded registrant.

  14. Determination that a Bond is No Longer Required - There are several situations that give rise to the determination that a bond is no longer required. These decisions will be made by the group manager. If it is determined that a bonded registrant subsequently meets the adequate security test or acceptable risk test without a bond, then the bond obligation is released. Refer to Treas. Reg. 48.4101-1(j)(5). A copy of the letter that was issued to the registrant must be uploaded into the registrant’s Form 637 IMS case file.

  15. When the IRS receives a bond cancellation or bond reduction request from registrants, the Form 637 Registration Group will take the appropriate actions that includes:

    1. Forwarding the requests for a bond decrease to the appropriate excise group for reconsideration.

    2. Conducting an IDRS compliance check on requests to cancel a bond and ensure the registrant does not have any outstanding tax liabilities under IRC 4041(a)(1) and/or IRC 4081, delinquent Forms 720 and/or under a Form 720 examination, before releasing the bond.

  16. Termination of Surety Bond - A surety on a bond may give written notice to the Chief, Estate & Gift/Excise Tax and the bonded registrant that the surety desires to be relieved of liability under the bond after a certain date, which date must be at least 60 days after the receipt of the notice by the Chief, Estate & Gift/Excise Tax. The surety will be relieved of any liability that the bonded registrant incurs after the date named in the notice. However, the surety remains liable for the amount of tax that the bonded registrant incurred under IRC 4041(a)(1) and IRC 4081 during the term of the bond and for penalties and interest with respect to that tax.

  17. Other Bond Terminations - A bond (other than a surety bond) may be returned to the bonded registrant only after the earlier of:

    1. The date the Chief, Estate & Gift/Excise Tax determines that the bonded registrant has paid all taxes that the bonded registrant incurred under IRC 4041(a)(1) and IRC 4081 during the period covered by the bond and any penalties and interest with respect to the taxes.

    2. The expiration of the period for assessment of the taxes that the bonded registrant incurred under IRC 4041(a)(1) and IRC 4081 during the period covered by the bond, as determined under the provisions of Subchapter A of Chapter 66 of the IRC.

    3. The date the Chief, Estate & Gift/Excise Tax receives from the registrant a substitute bond.

    Note:

    Refer to Treas. Reg. 48.4101-1(j)(4)(ii) for additional information about other bond terminations.

Penalty for Failure to Register or Reregister Under IRC 6719

  1. IRC 6719, Failure to register or reregister, imposes a civil penalty on every person required to register or reregister under IRC 4101 and who fails to do so, unless the taxpayer establishes that the failure was due to reasonable cause. The amount of the penalty shall be both:

    • $10,000 for each initial failure to register or reregister.

    • $1,000 for each day thereafter such person fails to register or reregister.

  2. The penalty is per activity letter where registration is required. Refer to Treas. Reg. 48.4101-1(c) for activities requiring registration.

  3. Statute date – The penalty under IRC 6719 should be assessed within three years, but no more than six years, from the date of the failure to register or reregister first occurred. The Form 637 IMS case file should be documented with the facts and circumstances of the assessment. The excise examiner must document when IRS first learned of the taxpayer’s failure to comply with IRC 4101 requirements and the responsive actions to assess the penalties. Refer to IRM 20.1.11.18(3), Statute of Limitations, for further information.

  4. For unagreed penalties, the taxpayer can appeal the penalty determination by submitting a protest that meets the requirements in Publication 3498, The Examination Process. Appeals considers these penalties after assessment. Refer to CFR 26.601.106, Appeals Functions, regarding appeal rights for liabilities determined under Chapter 68, Subchapter B (Additions to the Tax, Additional Amounts and Assessable Penalties).

  5. Penalties may be abated, if the person can show reasonable cause for the non-compliance. Refer to IRM 20.1.1.3.2, Penalty and Interest, Penalty Handbook, Reasonable Cause, for further information

  6. The penalty assessments under IRC 6719 require a separate IMS case file.

  7. In the event a penalty proposal is warranted, the excise examiner will prepare and submit the following documents to the group manager:

    1. Form 5345-D, Examination Request - ERCS (Examination Returns Control System) Users, to control the penalty period(s). Refer to IRM 4.24.17.5(6), Excise Summary Terminal Activity Reporting System (ExSTARS) Compliance Examination Procedures, ExSTARS Examination Return Control System (ERCS) Procedures, and/or the Excise Tax Knowledge Base Home, Form 637 Registration Shelf, Penalties book, for detailed guidance on how to complete Form 5345-D.

      Note:

      Use Tracking Code 7640 for an initial review, Tracking Code 7641 for a sample review or Tracking Code 7642 for a discretionary review.

    2. E500, Penalty Check Sheet and Approval Form.

    3. Form 886-A, Explanation of Items.

  8. The Form 5345-D should include the following data field information:

    • Entity’s name and address.

    • Check the "Control Penalty Investigation" box.

    • The Tax Identification Number (TIN).

    • MFT– PH (When the penalty is assessed it will post to MFT 13).

    • Form Type - 8278.

    • Tax Period - The controlling period for the IRC 6719 penalty is the month when the failure to register first occurred.

    • Activity Code - 555 - Other Penalties - Form 8278.

    • Source Code - 99 Non-AIMS Miscellaneous Penalty.

    • Status Code - 10 - Once time is applied, status will update to 12.

    • Statute Date - Enter three years from the date the failure to register or reregister occurred.

    • Tracking Code - 7640 - Initial Review, 7641 - Sample Review, 7642 - Discretionary Review.

    • Project Code - Leave blank.

  9. Upon approval, the group manager will establish the ERCS penalty period and return the executed form to the excise examiner. The original documents are placed in the Form 637 IMS case file with a copy of each document included in the newly-established IMS penalty case file.

  10. Upon receipt of the executed E500, the excise examiner should discuss the penalty proposal with the applicant or registrant.

  11. Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties, is used to assess a penalty.

    Note:

    Refer to IRM 4.24.17.10, Instructions for Completing Form 8278, Computation and Assessment of Miscellaneous Penalties, Non-Return Related Civil Penalties, for additional information.

    Note:

    For additional information about assessing a penalty explained with examples, refer to the Penalties Knowledge Base Home, Business and Function-Specific Penalties shelf, Excise book, Other Penalties Associated with Excise Taxes chapter, Failure to Register or Reregister page at Related Forms and Documents located at the IRC 6719 Penalty Example with Forms.

IRC 6719 No Penalty Case File Closing

  1. A No Penalty Case File, the IMS Case file, should contain the following documentation:

    • Form 3198, Special Handling Notice for Examination Case Processing.

    • E500 with manager’s signature.

    • Form 886-A, Explanation of Items.

    • Supporting workpapers.

    • A copy of Letter 4601, No Penalty for Failure to Register.

  2. The case will be closed to the group manager who will issue Letter 4601 to the applicant or registrant, close the IMS file and maintain the paper file in the group.

  3. Copies of Letter 4601, E500, Form 886-A and supporting workpapers should be uploaded into the IMS Form 637 case file before closing.

IRC 6719 Agreed Penalty Case File Closing

  1. An Agreed Penalty Case File, the IMS case file, should include the following completed documents:

    • Form 3198 - Check the "Other Instructions" box in the "Special Features" section and insert the following language: "6719 Penalty Case File – Assess using Reference Code 670."

    • Form 8278.

    • Form 5384, Excise Tax Examination Changes and Consent to Assessment and Collection, using Activity Code 555.

    • Form 886-A.

    • E500 with manager’s signature and supporting workpapers.

    • Copy of Letter 4600, Penalty for Failure to Register.

    • The applicant’s or registrant’s written response, if applicable.

    • Form 3244-A, Payment Posting Voucher, if applicable.

  2. The excise examiner will prepare Letter 4600 and have the group manager sign letter and mail it to the applicant or registrant.

  3. Copies of Letter 4600, E500, Form 886-A, Form 5384, supporting workpapers and applicant’s/registrant’s written response, if applicable should be uploaded into the IMS Form 637 case file before closing.

IRC 6719 Unagreed Penalty Case File Closing

  1. An Unagreed Penalty Case File, the IMS penalty case file, should contain the following:

    • Form 3198.

    • Form 4665, Report Transmittal.

      Note:

      For Appeals, include the date of the failure to register or reregister first occurred, the statute date and the controlling tax period for the IRC 6719 penalty.

    • Form 8278.

    • Form 5384.

      Note:

      Form 5384 is used for both agreed and unagreed cases. The taxpayer’s signature is not required for an unagreed case.

    • Form 886-A.

    • The applicant’s or registrant’s written response.

    • The excise examiner’s rebuttal.

    • E500 with manager’s signature and related workpapers.

    • Copy of Letter 4600.

      Note:

      Letter 4600 is used for both agreed and unagreed penalty cases.

    • Form 3244-A, if applicable.

  2. The excise examiner will prepare Letter 4600, which gives the applicant or registrant 30 days to respond. The group manager signs Letter 4600 and mails it to applicant or registrant.

  3. If the applicant or registrant does not agree with the penalty assessment, then he or she may:

    1. Request a managerial conference.

    2. Request Appeals consideration.

      Note:

      Appeals considers these penalties after assessment.

    3. Pay the penalty and file a claim for refund or bring suit in the United States District Court or in the United States Court of Claims.

  4. Penalty case files will be closed unagreed and forwarded to CCP for assessment when the applicant or registrant does any of the following:

    • Fails to respond timely to Letter 4600.

    • Wishes to pay the penalty and petition the court.

    • Wishes to pay the penalty and file a claim for refund.

  5. An Appeals request requires the case be updated to Status 21 and forwarded to Technical Services.

  6. IRM 25.6.23.7.1, Special Topics, Statute of Limitations, Examination Process - Assessment Statute of Limitations Controls, requires a minimum of 365 days remaining on the assessment statute before an unagreed case will be accepted by Appeals.

  7. Copies of Letter 4600, E500 and supporting workpapers, Form 886-A, Form 5384 (unsigned) and the applicant’s or registrant’s written response, if applicable, should be uploaded into the IMS Form 637 case file before closing.

Changes in the Information Submitted in Connection with Application for Registration

  1. Under Treas. Regs. 48.4101-1(h)(1)(v) each registrant must notify the Chief, Estate & Gift/Excise Tax or designee of any change in the information the registrant submitted in connection with its application for registration, or previously submitted under this paragraph (h)(1)(v), within 10 days after the change occurs. These changes include, but are not limited to:

    • Ownership.

    • Name.

    • Address.

    • Business activities.

  2. When verbal or written notification is received from a registrant that there has been a change in the information submitted in connection with the application for registration, such information will be forwarded to the Form 637 Registration Group manager via secure e-mail or fax.

    Note:

    For additional information about Form 637 Registration Group Contacts, refer to the Form 637 Registration Shelf, Registration Information Book, Other Related Resources page located at the Excise Tax Knowledge Base Home.

  3. If there has been a name change, change in entity type or change in ownership, then the excise examiner or TE should secure Secretary of State documentation to support these changes.

  4. Upon receipt of the notification, the Form 637 Registration Group manager will:

    1. Document the receipt of the notification in the Form 637 IMS case file CLA.

    2. If applicable, assign the Form 637 IMS case file to the LT who then will update the file and take additional actions as warranted.

  5. If a registrant fails to notify the Secretary within 10 days after the change occurs, then the Chief, Estate & Gift/Excise Tax may take remedial action on the registration, such as, revoking or suspending the registrant's registration. Refer to Treas. Reg. 48.4101-1(i)(2).

Procedures for Changes in Ownership

  1. For registrants under IRC 4101, IRC 4101(a)(5), Reregistration in event of change in ownership, discusses reregistration in the event of change in ownership. Under regulations prescribed by the Secretary, a person (other than a corporation the stock of which is regularly traded on an established securities market) shall be required to reregister under this section if after a transaction (or series of related transactions) more than 50 percent of ownership interests in, or assets of, such person are held by persons other than persons (or persons related thereto) who held more than 50 percent of such interests or assets before the transaction (or series of related transactions). This will require a new Form 637 be filed.

  2. For registrants under IRC 4222 and IRC 4682, they must notify the IRS within 10 days if any of the information submitted with an application changes.

  3. For all registrants, a change in EIN number will require a new Form 637 be filed.

  4. Changes in ownership that do not involve obtaining a new Form 637 application will be properly documented in the Form 637 IMS case file CLA by the LT. At a minimum, the LT will:

    1. Secure the names and TINs of the new owners.

    2. Conduct an IDRS compliance check on the new owners.

    3. Ensure that the person who signed the approved application can continue to bind the registrant. If not, then obtain a new Form 637 application signed by a person that can bind the registrant.

    4. Document the Form 637 IMS case file CLA about all actions taken.

  5. For changes in ownership that require reregistration under IRC 4101(a)(5) and where the EIN did not change. The LT will:

    1. Obtain a new Form 637 application (if not provided) and ensure the application is signed by a person that can bind the applicant.

    2. Create a sample review and assign the Form 637 IMS case file to the appropriate excise group.

    3. Upload the application and documentation on the change in ownership in the existing Form 637 IMS case file under "Workpapers." The change in ownership on IMS will be made after the excise group makes a final determination on the application, completes the sample review and updates the Form 637 IMS case file to Status 70 - LT Review. The Form 637 registration group will update the change in ownership on IMS and issue the appropriate registration letters.

    4. E-mail the group manager, via secure e-mail, about the establishment of the sample review, change in ownership and new application.

    5. Document the Form 637 IMS case file CLA of all actions taken.

  6. For changes in ownership that require reregistration under IRC 4101(a)(5) and the EIN change, a new Form 637 application will be required and processed in accordance with the procedures found in IRM 4.24.24.4.3.1, Status 20 - IDRS Compliance Check Procedures. Once the case is returned back to the LT in Status 30 - LT Review, the assigned LT will:

    1. Create a sample review on the existing Form 637 IMS case file.

    2. Upload documentation of the ownership change in both Form 637 IMS case files.

    3. Notify the group manager via secure e-mail of the ownership change.

    4. Assign the initial application and sample review to the excise group to make the final determinations on both Form 637 IMS case files.

    5. Document the Form 637 IMS case file CLA of all actions taken.

Procedures for Name Changes

  1. When notification of a name change is received and the name does not match the name on IMS or IDRS, the LT will:

    1. Contact the registrant and secure documentation about the name change, if applicable, such as, filings with the Secretary of State or corporate minutes. An internet search can also be conducted at the registrant's Secretary of State website.

    2. Once documentation on the name change is received, change the name on IMS and issue a Letter 3689 with the new name to the registrant.

    3. Complete Form 2363, Master File Entity Change, and forward the completed form to Centralized Case Processing (CCP).

    4. Upload documentation of name change, Letter 3689 and Form 2363 into the Form 637 IMS case file.

    5. Document the Form 637 IMS case file CLA for all actions taken.

  2. When notification of a name change is received and the new name does not match IMS, but matches the name on IDRS (e.g., the ENMOD), the LT will:

    1. Secure an ENMOD and ensure the prior name shown on the ENMOD matches the name on IMS.

    2. Change the name on IMS.

    3. Prepare and issue Letter 3689 with the new name to the registrant.

    4. Upload a signed copy of Letter 3689 and ENMOD into the Form 637 IMS case file.

    5. Document the Form 637 IMS case file CLA for all actions taken.

    Note:

    If the prior name shown on the ENMOD is not the same as IMS, then a compliance review may be warranted.

Procedures for Changes in Registration Activities

  1. If a registrant requests to add an additional activity to its approved registration, then a new Form 637 is required for the additional activity. The new Form 637 will be processed in accordance with the established procedures in IRM 4.24.24.4.3.1, Status 20 - IDRS Compliance Check Procedures.

  2. When notification is received from a registrant that the taxpayer no longer engages in the activity for which the registrant is approved, the LT will:

    1. Secure a written consent, from a person that can bind the registrant, to revoke the activity that is no longer needed and upload the consent into the Form 637 IMS case file.

    2. Prepare Letter 3691 and update the Form 637 IMS case file to status 65 - Deny/Revoke.

    3. If applicable, prepare and issue Letter 3689 with the current approved activity and then upload the signed copy of letter into the Form 637 IMS case file.

    4. Document all actions taken on the Form 637 IMS case file CLA.

Relationship Between Form 637 Compliance Reviews and Examinations

  1. If an applicant’s or registrant’s books and records are inspected for a filed, delinquent or potentially delinquent return, then an examination has been initiated and appropriate examination procedures will be followed.

  2. Inspection of books and records for periods for which a return is not filed (excluding delinquent returns) is not an examination.

  3. Inspection of exemption certificates, contracts, financial statements and other records not used in determining a tax liability is not an examination.

  4. Inspection of a filed return that does not involve an inspection of supporting books and records is not an examination.

Examinations Resulting from Form 637 Compliance Reviews

  1. When substantial noncompliance is found during a compliance review, the excise examiner will expand the scope into an examination after receiving approval from the group manager.

  2. The excise examiner will submit a Form 5345-D to establish case controls within three business days after approval from the group manager using Project Code 637 and the Tracking Code applicable to the type of compliance review. Refer to IRM 4.24.2.6(7)(a) for additional information about Tracking Codes.

  3. Once the examination is completed, a copy of the report must be uploaded into the Form 637 Registration case file.

  4. Follow procedures found in IRM 4.24.23.7.4, Excise Tax Field Group Procedures Initial Application Review, or IRM 4.24.23.7.5, Excise Tax Field Group Procedures - Compliance Review, to close out the Form 637 Registration file.

Disclosure

  1. IRC 6103(k)(7), Disclosure of excise tax registration information, provides to the extent the Secretary determines that disclosure is necessary to permit the effective administration of subtitle D, that the Secretary may disclose:

    • The name, address and registration number of each person who is registered under any provision of subtitle D (and, in the case of a registered terminal operator, the address of each terminal operated by such operator).

    • The registration status of any person.

  2. Any request for disclosure not listed in (1) above will be forwarded to the Form 637 Registration Group Manager. The request will concisely state the administrative necessity for disclosure.

  3. All contacts and disclosures will be recorded on Form 9984 and uploaded into the applicant’s or registrant’s Form 637 IMS case file or in the Form 637 IMS case file CLA.

Taxpayer Advocate Service (TAS) Referrals and Inquiries

  1. The Excise Technical Advisor is the point of contact for all TAS referrals and inquiries. When inquiries are received from TAS concerning initial Form 637 registration applications for which no determination has been made and the applicant requests the application be expedited, the referral is submitted to the Form 637 Registration Group manager for review.

    Note:

    For additional information about Form 637 Registration Group Contacts, refer to the Form 637 Registration Shelf, Registration Information Book, Other Related Resources page located at the Excise Tax Knowledge Base Home.

  2. The Form 637 Registration Group manager and the group manager will review the facts and circumstances surrounding the case and determine if the application should be expedited. Factors to consider include, but are not limited to the following:

    • What hardship would the applicant suffer should the application not be expedited?

    • When was the application filed and how long has the application been in process?

    • Does the applicant have a deadline that is beyond his or her control?

    • What documented case actions have occurred to date?

    • What is the reason for the delay?

  3. If it is decided to expedite the case, then the Form 637 Registration Group Manager will issue the registration number and forward the Form 637 IMS case file to the group manager for a final determination. At or shortly after receipt, the group manager will direct the excise examiner to complete the case. The excise examiner is responsible for communicating his or her decision to the applicant.

  4. If it is decided not to expedite the case, then the group manager will direct the excise examiner to contact the applicant to provide an update on the case progress.

  5. If the inquiry originates directly from the applicant via the Excise Tax Hotline, then the Form 637 Registration Group Manager should be contacted within two business days to allow him or her to review and discuss the situation and involve the assigned group manager, if warranted.

Third Party Contacts

  1. For detailed information and guidance about third party contacts, refer to IRM 4.24.15.2.2, Excise Fuel Compliance Inspection, Sampling and Shipping, Third Party Contacts.

  2. For additional information about third party contacts, refer to Excise Examination shelf, Examination in Process book, Third Party Contacts page located at the Excise Tax Knowledge Base Home.