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.

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.

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.

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.

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.

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

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

Form 637 registrations are processed under the following authorities:

Delegation Order SB/SE-1-23-7 (formerly SB/SE DO 4.36, Rev. 3), Approval or Rejection/Disapproval or Revocation of Form 637, delegates the authorities for approving, denying, revoking and suspending Form 637 registrations.

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.

This section is tailored for the administrative procedures for Form 637 initial applications and case reviews. Refer to IRM 4.24.2 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 Registrations and Secure Airport Terminals (SAT), for information about the operational roles, responsibilities and procedures for Form 637 Registrations and SATs.

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

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

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

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

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

Program Effectiveness - Program goals are measured with Excise Embedded Quality Performance Reports that monitor whether quality attributes are applied uniformly and consistently.

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

Below are definitions for terms frequently used throughout this section:

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

Form 637 registrations are processed under the following authorities:

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

For general information about basic excise examiner responsibilities, excise IRM Sections, primary excise returns and claims forms, as well as materials about excise fuel abstracts and issues, refer to IRM 4.24.4 , Excise Fuel Taxes Workload, Policies and Procedures.

For general guidance, procedures, tax law and regulations on a wide variety of excise issues, refer to Excise Tax Knowledge Base.

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.

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

The Form 637 Registration Group Manager's Queue Manager Q1 displays all Form 637 IMS case files in Status 10 (Pending) that have been input by CSTO or created by an LT. Status 10 cases include new applications and follow-up compliance reviews.

The Form 637 Registration Group Manager and/or Queue Manager shall assign territory assignments on all Form 637 IMS cases in Status 10. Territory assignments are based on the geographical location of the applicant or registrant.

Once the territory has been assigned, the Form 637 IMS case file will be placed in Status 15 (Territory Assigned) in the case inventory for the LT assigned to the territory.

Status 15 Form 637 IMS case files include initial applications, discretionary and sample reviews.

The LT will assign Form 637 IMS case files in Status 15 to TEs in the Form 637 Registration Group and to excise groups from LT Assignment Queue 1.

Under LT Assignment Q1, the LT will assign initial applications in Status 15 to the TE and update to Status 20 (Compliance Check).

Form 637 Registration Group sample reviews in Status 15 will be assigned by the LT to a TE and updated to Status 20 (Compliance Check).

The LT assigning a sample review to an excise group will:

The LT assigning a discretionary review to an excise group will:

A Form 637 IMS case file in Status 20 is either an initial application or a sample review assigned to the Form 637 Registration group. This will allow the TE to:

If the initial application or sample review is designated a Form 637 Registration Group case, then the TE will complete the initial application or sample review. The TE will:

The initial application or sample review will only be designated as an excise group case, if there is an open excise examination, no compliance issues have been identified and Letter 3681 was not returned "undeliverable" for an initial application only.

If the initial application or sample review is designated an excise group case, then the appropriate registration tests and final determination will be conducted by the excise group.

If the LT returns an initial application or sample review to the TE for corrections, then it will be updated to Status 20 and returned to the TE. The TE must take action within 10 days of assignment.

The Form 637 review of an initial application in IMS Status 20 designated as a Form 637 Registration Group case will be completed within 45 days of assignment on IMS. If deficiencies are discovered, then the TE has 60 days from the date of assignment to complete the initial application review. If third-party contacts are necessary, then the TE has 120 days from the date of assignment to complete the initial application review. Extensions to these timeframes may be approved by the LT. TE’s must document the Form 637 IMS case file CLA with the reasons for the delay and the estimated completion date.

The IDRS compliance check for an initial application in Status 20 designated as an excise group case will be completed within 45 days of assignment on IMS. If deficiencies are found on an application designated as an excise group case, then the TE will attempt to resolve the deficiencies and recommend denial if the deficiencies are not resolved. At that time, the TE will document the Form 637 IMS recommendation screen and the Form 637 IMS case file CLA accordingly.

Applications in Status 20 that contain mixed activity letters assigned to both the Form 637 Registration Group and excise groups will be worked as an excise group case. For example, an application with Activity Letter "A" for the manufacturer of sports fishing equipment and Activity Letter "D" buyer of sports fishing equipment for export will be worked as an excise group case. The excise group will make the final determination on all activity letters, which were applied for on the application. The TE is not required to complete the activity letter Job Aid. These types of applications will be processed as an excise group case following procedures found in IRM 4.24.24.4.3.3.

The criteria for what constitutes a Form 637 Registration Group or an excise group case will be reviewed as warranted based on the needs of the Excise Tax Program. If excise groups need additional work, then cases that were previously considered Form 637 Registration Group cases may be reclassified as excise group cases. Conversely, if a case has been assigned to a particular excise group that has other higher priority workload, then the case may be reassigned to the Form 637 Registration Group.

Both Form 637 Registration Group and excise group Form 637 IMS case file initial applications completed and approved by the TE will be updated to IMS Status 30 for an LT review.

The Form 637 IMS case file is returned to the LT that assigned the Form 637 IMS case file to the TE in Status 20.

The LT will confirm the determination by the TE that the Form 637 IMS case file is:

Form 637 Registration Group cases are kept within the Form 637 Registration Group, and the LT will make the determination to approve the application for registration.

All cases that are denied on IMS by the TE are updated to Status 65 (Q Manager Deny/Revoke) and placed in the Form 637 Registration Group Manager Queue Manager Q2 for concurrence and to make the final determination.

If a Form 637 Registration Group case has multiple activity letters and some are denied and others are approved, then the Form 637 IMS case file will be updated to Status 30 and placed in the LT Process Q2 for a final determination on the activity letter(s) that the TE recommended be approved. The denied activity letters will be forwarded to Status 65.

When it is determined a Form 637 Registration should be denied, revoked, suspended or the taxpayer requests withdrawal of a registration, the Form 637 IMS case file is updated to Status 65 and placed in IMS Queue Manager Q2 (Q Manager Q2), Deny and Revoke/Suspend queue to make the final action on IMS. The term Q Manager Q2 is IMS’s queue name for the Deny and Revoke/Suspend queue within IMS and has certain administrative permissions for processing Form 637 IMS case files. The Q Manager Q2 is assigned to the Form 637 Registration Program with oversight by the Form 637 Registration Group manager.

The Form 637 Registration Group manager's concurrence is required on all Form 637 IMS case files that are denied, revoked or suspended in his or her group. He or she will:

Status 70 cases are Form 637 IMS case files with a change in ownership closed by an excise group to the LT or a recommended denial of an appeal.

If it is a change in ownership case, then the LT will:

If it is a recommend denial of an appeal case, then the LT will:

Form 637 IMS case files assigned to an LT in Status 80 include, but are not limited to, ownership changes, name changes, or those ready for final disposition.

The LT will document all actions taken and contacts made in Form 637 IMS case file CLA.

When a Form 637 IMS case file is assigned to Status 80 for a final disposition, the LT (or delegate) will:

Once all actions are completed, the LT will change the Form 637 IMS case file status to "Complete Review" and update the Form 637 IMS case file to Status 90. The Form 637 IMS case file is now finalized in IMS.

Once the final determination has been made by the LT to approve a registration or the Form 637 Registration Group manager to deny, revoke or suspend a registration, applicable Form 637 Registration correspondence will need to be prepared and sent to the applicant or registrant. The TE assigned to a Form 637 IMS case file in IMS Status 85 will:

Once the above actions are completed, the TE will change the Form 637 IMS case file status to "Complete Review" and update the Form 637 IMS case file to Status 90 (Complete). The Form 637 IMS case file is now finalized in IMS.

The indicator on the BMF account should be updated when:

Form 2363 must be completed and faxed to Centralized Case Processing (CCP) that will update the indicator on the BMF account.

The E-fax number for CCP may be found on Knowledge Management at the Form 637 Registration shelf, Current Issues book on the Where to send the Form 2363 page.

The Form 637 Registration Group manager or delegate will:

The Form 637 Registration Group manager or delegate will use command codes ENMOD or BMFOLE to verify the BMF account has been updated with the Form 2363 information.

Form 637 registrants whose indicators are active will be monitored for compliance. A Notice CP 241 is generated when one or more of the eleven conditions listed below is met. The condition printed on the notice identifies the reason it was generated.

On a monthly basis, the Form 637 Registration Group Manager or delegate will download the Notices CP 241 from the Control D WebAccess Server.

Notice CP 241 will be reviewed by the Form 637 Registration Group manager or delegate and appropriate action as described in IRM 4.24.24.5.2(4) below are taken.

The 11 conditions listed below indicate that excise involvement may be required for the registrant's account:

When a Notice CP 241 is generated, the Form 637 Registration Group manager or delegate will review, prioritize and determine the next action required for each notice.

If conditions code 1 is indicated, then a representative sample will be selected and the following actions will be completed:

If conditions 2, 3, 4, 6, 8 and/or 9 are indicated, then the following actions will be completed:

If conditions 1, 2, 3, 4, 6, 8 and/or 9 are not addressed in a satisfactory manner within 30 days of contact, then action must be initiated to revoke or suspend the registration until the condition is corrected.

If condition 5 is indicated, then review IDRS to ascertain it is a final return. If so, then send Letter 3687, Verification of Excise Tax Registration, to the registrant to confirm whether the registration is still needed. If it is determined (after reviewing IDRS) this is not the final return, then document the Form 637 IMS case file CLA and no further action is needed.

If condition 7 is indicated, then this case will be worked as a sample review by the Form 637 Registration Group or forwarded to the excise group.

If condition 10 is indicated, then the Form 637 Registration Group manager or designee will review IDRS information, document the Form 637 IMS case file CLA and take appropriate actions.

If condition 11 is indicated, then the Form 637 Group Manager or designee will contact CID to determine the reason for its involvement. At that time, obtain required CID approval before any actions are taken and document accordingly the Form 637 IMS case file CLA.

All decisions, actions and contacts with the registrant will be documented on the Form 637 IMS case file CLA. If the registrant has been contacted, then written notification of the final determination will be provided using Letter 3696.