Publication 378 Contents (Rev. April 2005)

Cat. No. 46455F What’s New ..................... 1 Department

of the Introduction ..................... 2 Treasury

Internal Fuel Tax 1. Fuels ........................ 2

Revenue

Service Credits 2. Definitions of Nontaxable Uses ..... 5

3. Filing Claims .................. 8

and Refunds 4. Alcohol Fuel Mixture Credit ........ 11

5. Biodiesel (Including

Agri-biodiesel) Mixture Credit ..... 12

6. Alcohol Fuel Credit .............. 12

7. Biodiesel (Including

Agri-biodiesel) Fuel Credit ....... 13

8. How To Get Tax Help ............ 13

Appendix ....................... 15

Index .......................... 21

What’s New

The American Jobs Creation Act of 2004 (the

Act), Public Law 108-357, made changes affecting fuel tax credits and refunds. The following is

a brief review of some of these changes.

The credits and refunds for the nontaxable

use of gasohol and, generally, the use of gasoline taxed at the full rate to produce gasohol

have been eliminated.

Credit for Alcohol Fuel Mixtures and Biodiesel (Including Agri-biodiesel) Mixtures.

The Act allows two new credits against any fuel

tax liability reported on Form 720:

• The alcohol fuel mixture credit is 51 cents

per gallon of ethanol (60 cents per gallon

for alcohol other than ethanol).

• The biodiesel mixture credit is 50 cents

per gallon of biodiesel ($1.00 per gallon of

agri-biodiesel).

• Producers and importers must first take

the alcohol fuel mixture credit and biodiesel mixture credit on Schedule C

(Form 720) against any fuel tax liability. A

payment is allowed for any excess credit

and may be taken as a credit on Schedule

C (Form 720), as a refund on Schedule 3

(Form 8849), or as an income tax credit on

Forms 4136, 6478, or 8864 as applicable.

Only one claim may be made for any particular amount of alcohol or biodiesel.

• Persons who blend alcohol with gasoline,

diesel fuel, or kerosene to produce an alGet forms and other information cohol fuel mixture outside the bulk transfer

terminal system must pay must pay the faster and easier by: gasoline tax on the volume of alcohol in

the mixture. See Form 720 to report this Internet • www.irs.gov tax. You also must be registered with the

IRS as a blender. See Form 637.

FAX • 703–368–9694 (from your fax machine) • Persons who blend biodiesel with undyed

diesel fuel to produce a biodiesel mixture
outside the bulk transfer terminal system The filled-in forms have been removed. For We respond to many letters by telephone.

must pay the diesel fuel tax on the volume copies of any forms referenced in this publica- Therefore, it would be helpful if you would inof biodiesel in the mixture. See Form 720 tion, see How To Get Tax Help later. clude your daytime phone number, including the

to report this tax. You also must be regis- area code, in your correspondence.

tered with the IRS as a blender. See

Form 637. Useful Items

You may want to see: • Producers and importers of straight alco- Introduction

hol or straight biodiesel must be registered This publication covers federal fuel tax credits Publication with the IRS. See Form 637. you may be able to claim on your income tax ❏ 510 Excise Taxes for 2005 return. It also covers fuel tax refunds you may be Aviation-grade kerosene is taxed and the able to claim during the year. tax on aviation fuel has been eliminated. The Form (and Instructions) This publication discusses the following sub- credit and refund rates are the same. jects. ❏ 637 Application for Registration (For Claims for Aviation-grade kerosene sold Certain Excise Tax Activities) for use on a farm or for use by state and local • The kinds of fuels that qualify for a credit governments can only be made by the regis- or refund. ❏ 720 Quarterly Federal Excise Tax

tered ultimate vendor. Return • The uses of fuels that qualify for a credit or

Credits and refunds can be made to certain refund. ❏ 720X Amended Quarterly Federal Excise

registered ultimate vendors if the ultimate Tax Return • Who may claim a credit or refund. purchaser waives its right to a claim for ❏ 4136 Credit for Federal Tax Paid on

credit or refund as follows. • How to claim a credit or refund for fuel Fuels

Aviation-grade kerosene sold for nontax- taxes.

able uses (other than use on a farm or use by ❏ 6478 Credit for Alcohol Used as Fuel • The alcohol fuel mixture credit. state and local governments). ❏ 8849 Claim for Refund of Excise Taxes

Gasoline and aviation gasoline sold to • The biodiesel mixture credit.

state and local governments and nonprofit edu- ❏ 8864 Biodiesel Fuels Credit • The alcohol fuel credit. cational organizations.

Undyed diesel fuel or undyed kerosene • The biodiesel fuel credit. Notices

sold for use by certain intercity and local buses. • Notice 2005-04. You can find Notice Refunds to gasoline wholesale distribu- Comments and suggestions. We welcome 2005-4 on page 289 of Internal Revenue tors have been eliminated for fuel sold after your comments about this publication and your Bulletin 2005-2 at www.irs.gov/pub/ December 31, 2004. Schedule 4 (Form 8849) suggestions for future editions. irs-irbs/irb05-02.pdf. will not be revised and cannot be used for fuel

You can email us at *taxforms@irs.gov. sold after December 31, 2004. • Notice 2005-24. You can find Notice Please put “Publications Comment” on the sub- Definition of off-highway vehicle. The Act 2005-24 on page 757 of Internal Revenue ject line. provides that a vehicle with certain described Bulletin 2005-12 at www.irs.gov/pub/ You can write to us at the following address: features for off-highway transportation is not irs-irbs/irb05-12.pdf.

treated as a highway vehicle. This provision

applies to taxable periods after October 22, Internal Revenue Service

2004. Fuel used in mobile machinery in an TE/GE and Specialty Forms and Publicaoff-highway business use is limited to an annual tions Branch

claim for taxable years beginning after October SE:W:CAR:MP:T:T

22, 2004. 1111 Constitution Ave. NW

Additional nontaxable uses of liquefied pe- IR-6406 1. troleum gas have been added. Washington, DC 20224

Table 1–1. Type of Use Table Fuels

 No. Type of Use (See Chapter 2 for definition of terms)

1 On a farm for farming purposes Federal excise taxes are imposed on certain 2 Off-highway business use (for business use other than in a highway vehicle fuels. This chapter defines the fuels and lists the registered or required to be registered for highway use) (other than use in mobile nontaxable uses of each fuel. The nontaxable machinery) uses are defined in Chapter 2. 3 Export

4 In a boat engaged in commercial fishing Type of use table. The nontaxable uses listed

5 In certain intercity and local buses under each fuel are from Table 1–1. The first

6 For diesel fuel or kerosene in a qualified local bus column of the table is the number you enter on

7 In a bus transporting students and employees of schools (school buses) Form 4136, Form 8849, or Schedule C (Form

8 For diesel fuel and kerosene (other than aviation-grade kerosene) used other 720) for that type of use. For type of use 2, the than as a fuel in the propulsion engine of a train or diesel-powered highway mobile machinery parenthetical applies only to vehicle (but not off-highway business use) Form 8849 and Form 720.

9 In foreign trade

10 Certain helicopter and fixed-wing air ambulance uses

11 For aviation-grade kerosene used other than as a fuel in the propulsion engine of

an aircraft Gasoline and Aviation

12 In a highway vehicle owned by the United States that is not used on a highway

13 Exclusive use by a nonprofit educational organization Gasoline

14 Exclusive use by a state, political subdivision of a state, or the District of

Columbia Gasoline means all products commonly or com15 In an aircraft or vehicle owned by an aircraft museum mercially known or sold as gasoline with an

16 In military aircraft octane rating of 75 or more that are suitable for

17 For use in the production of special fuels use as a motor fuel. Gasoline includes any gasoline blend other than:

Page 2 Chapter 1 Fuels
Sales by Registered Ultimate F-76 (Fuel Naval Distillate) covered by military • Qualified ethanol and methanol fuel (at specification MIL-F-16884. least 85 percent of the blend consists of Vendors

alcohol produced from coal, including An excluded liquid is either of the following.

peat), This is a new category of registered ultimate

vendor. This is an ultimate vendor that sells 1. A liquid that contains less than 4% normal • Partially exempt ethanol and methanol fuel gasoline or aviation gasoline to any of the follow- paraffins. (at least 85 percent of the blend consists ing. of alcohol produced from natural gas), or 2. A liquid with all the following properties.

• A state or local government for its exclu- • Denatured alcohol. a. Distillation range of 125 degrees Fahr- sive use (including essential government enheit or less. Gasoline also includes gasoline blendstocks, use by an Indian tribal government).

discussed in Publication 510, and any product b. Sulfur content of 10 ppm or less. • A nonprofit educational organization for its commonly used as an additive in gasoline (other exclusive use. c. Minimum color of +27 Saybolt. than alcohol).

Aviation gasoline means all special grades of The registered ultimate vendor may make the Transmix means a by-product of refined

gasoline suitable for use in aviation recipro- claim if the ultimate purchaser waives its right to products created by the mixing of different speccating engines and covered by ASTM specifica- the credit or refund by providing the registered ification products during pipeline transportation.

tion D 910 or military specification MIL-G-5572. ultimate vendor with a certificate. A sample cer- Kerosene means any of the following li- tificate is included as Model Certificate D in the quids.

Nontaxable Uses Appendix on page 18. The registered ultimate

vendor must have the certificate at the time the • One of the two grades of kerosene (No.

The following are the uses of gasoline for which credit or refund is claimed. 1–K and No. 2–K) covered by ASTM

a credit or refund may be allowable to an ulti- The ultimate vendor must be registered by specification D 3699.

mate purchaser. the IRS. See Publication 510 for a discussion of • Kerosene-type jet fuel covered by ASTM the registration requirements. • On a farm for farming purposes (credit specification D 1655 or military specificaonly). tion MIL-DTL-5624T (Grade JP-5) or

MIL-DTL-83133E (Grade JP-8). See • Off-highway business use. Aviation-Grade Kerosene later.

• Export. Gasohol Blending

Kerosene also includes any liquid that would • In a boat engaged in commercial fishing. The credits and refunds for the nontax- be described above but for the presence of a

• In certain intercity and local buses. able use of gasohol and, generally, the dye of the type used to dye kerosene for a

CAUTION use of gasoline taxed at the full rate to nontaxable use. ! • In a school bus. produce gasohol have been eliminated. The However, kerosene does not include an ex-

• In a highway vehicle owned by the United new credits for alcohol fuel mixtures and bi- cluded liquid, discussed above.

States that is not used on a highway. odiesel mixtures are discussed in Chapter 4,

• Exclusive use by a nonprofit educational Alcohol Fuel Mixture Credit, and Chapter 5, Bi- Nontaxable Uses

odiesel Mixture Credit. organization (see sales by registered ulti- The following are the uses of undyed diesel mate vendors). fuel and undyed kerosene for which a credit or

• Exclusive use by a state, political subdivi- refund may be allowable to an ultimate pursion of a state, or the District of Columbia Undyed Diesel Fuel chaser.

(see sales by registered ultimate vendors). • Off-highway business use.

• In an aircraft or vehicle owned by an air- and Undyed Kerosene • Export. craft museum. (Other Than • In certain intercity and local buses.

The following are the uses of aviation gaso- Aviation-Grade • In a qualified local bus. line for which a credit or refund may be allowable to an ultimate purchaser. Kerosene) • In a school bus.

• On a farm for farming purposes (credit • Used other than as a fuel.

only). Diesel fuel means: • In a train (undyed diesel fuel only).

• Export. • Any liquid that without further processing • In a highway vehicle owned by the United or blending, is suitable for use as a fuel in • In foreign trade. States that is not used on a highway. a diesel-powered highway vehicle or train,

• Certain helicopter and fixed-wing air am- • Exclusive use by a nonprofit educational • Transmix, and bulance uses. organization.

• Diesel fuel blendstocks (when identified by • In commercial aviation (other than foreign • In a vehicle owned by an aircraft museum. the IRS). trade).

A liquid is suitable for this use if the liquid has No credit or refund is allowable for any use of • Exclusive use by a nonprofit educational practical and commercial fitness for use in the dyed diesel fuel and dyed kerosene. You buy organization (see sales by registered ulti- propulsion engine of a diesel-powered highway these fuels excise tax free. See Publication 510 mate vendors). vehicle or diesel-powered train. A liquid may for more information about dyed fuels.

• Exclusive use by a state, political subdivi- possess this practical and commercial fitness

sion of a state, or the District of Columbia even though the specified use is not the predom- Sales by Registered Ultimate (see sales by registered ultimate vendors). inant use of the liquid. However, a liquid does Vendors not possess this practical and commercial fit- • In a aircraft owned by an aircraft museum. ness solely by reason of its possible or rare use The following are the sales for which a credit or • In military aircraft. as a fuel in the propulsion engine of a refund may be allowable to the registered ulti- diesel-powered highway vehicle or diesel-pow- mate vendor only. ered train. Diesel fuel does not include gasoline,

kerosene, excluded liquid, No. 5 and No. 6 fuel • Undyed diesel fuel or undyed kerosene

oils covered by ASTM specification D 396, or sold for use on a farm for farming purChapter 1 Fuels Page 3
poses or for exclusive use by a state or (discussed in Publication 510), a registered ulti- Sales by Registered Ultimate local government, mate vendor, or a registered ultimate vendor Vendors (blocked pump). • Undyed kerosene sold from a blocked

pump (defined below), A credit or refund may be allowable to a The registered ultimate vendor of aviation-grade

registered ultimate vendor (blending) if the ven- kerosene may make a claim for a nontaxable • Undyed kerosene sold for blending, or dor sold undyed kerosene in an area described use only if the ultimate purchaser waives its right

• Undyed diesel fuel or undyed kerosene to make a claim by providing the registered in an IRS declaration of extreme cold for the

used in certain intercity and local buses, ultimate vendor with a waiver. A sample waiver production of a cold weather blend. only if the ultimate purchaser waives its is included as Model Waiver C in the Appendix Cold weather blend. This is a blend of ker- right to the credit or refund by providing on page 17. The ultimate vendor must have the

the registered ultimate vendor with a osene and diesel fuel produced in an area de- waiver at the time the credit or payment is

waiver. scribed in an IRS declaration of extreme cold claimed.

and sold for use or used for heating purposes. A nontaxable use for this purpose means

Registered ultimate vendor (farming and any use that is exempt from the tax imposed

state use). This is a person that sells undyed Registered ultimate vendor (certain intercity under section 4041(c) (other than by reason of a

diesel fuel or undyed kerosene to any of the prior imposition of tax) and any use in commer- and local buses). This is a new category of

following. registered ultimate vendor. This is an ultimate cial aviation within the meaning of section

4083(b). vendor that sells undyed diesel fuel or undyed • The owner, tenant, or operator of a farm kerosene to the ultimate purchaser for use in for use by that person on a farm for farm- Registered ultimate vendor (farming and certain intercity and local buses. ing purposes. state use). This is an ultimate vendor that

The registered ultimate vendor may make • A person other than the owner, tenant, or sells aviation-grade kerosene to any of the fol- the claim if the ultimate purchaser waives its operator of a farm for use by that person lowing.

on a farm in connection with cultivating, right to the credit or refund by providing the

raising, or harvesting. registered ultimate vendor with a waiver. A sam- • The owner, tenant, or operator of a farm

ple waiver is included as Model Waiver E for use by that person on a farm for farm- in the • A state or local government for its exclu- Appendix on page 19. The registered ultimate ing purposes. sive use (including essential government vendor must have the waiver at the time the • A person other than the owner, tenant, or use by an Indian tribal government). credit or payment is claimed. operator of a farm for use by that person The ultimate vendor must be registered by the on a farm in connection with cultivating, IRS. See Publication 510 for a discussion of the raising, or harvesting. registration requirements. • A state or local government for its excluRegistered ultimate vendor (blocked pump). Aviation-Grade sive use (including essential government

This is an ultimate vendor that sells undyed use by an Indian tribal government).

kerosene from a blocked pump. Kerosene

The claim for a credit or refund may be allowable A credit or refund may be allowable to a Aviation-grade kerosene replaces aviation fuel. to the registered ultimate vendor only. The ulti- registered ultimate vendor (blocked pump) if the Aviation-grade kerosene means kerosene-type mate vendor must be registered by the IRS. See vendor sold to a buyer undyed kerosene from a Publication 510 for a discussion of the registra- jet fuel covered by ASTM specification D 1655 or blocked pump for use other than as a fuel in a tion requirements. military specification MIL-DTL-5624T (Grade diesel-powered highway vehicle and the vendor

had no reason to believe the kerosene would not JP-5) or MIL-DTL-83133E (Grade JP-8).

be used in that manner.

Nontaxable Uses Blocked pump. A blocked pump is a fuel Liquefied Petroleum pump that meets all the following requirements. The following are the uses of aviation-grade

kerosene taxed at the full rate for which a credit Gas

1. It is used to make retail sales of undyed or refund of the full rate may be allowable to an kerosene for use by the buyer in any non- Liquefied petroleum gas (LPG) includes pro- ultimate purchaser. taxable use. pane, butane, and pentane, or mixtures of those

gases. 2. It is at a fixed location. • Export.

3. It is identified with a legible and conspicu- • In foreign trade. Nontaxable Uses ous notice stating, “UNDYED UNTAXED • Certain helicopter and fixed-wing air am- KEROSENE, NONTAXABLE USE ONLY.” The following are the uses of taxed LPG for bulance uses.

4. It meets either of the following conditions. which a credit or refund may be allowable to an • Used other than as a fuel in the propulsion ultimate purchaser.

a. It cannot reasonably be used to dis- engine of an aircraft.

pense fuel directly into the fuel supply • On a farm for farming purposes. • Exclusive use by a nonprofit educational tank of a diesel-powered highway vehi- organization. • Off-highway business use. cle or train.

• • In a boat engaged in commercial fishing. In a aircraft owned by an aircraft museum. b. It is locked by the vendor after each • In certain intercity and local buses. sale and unlocked by the vendor only in • In military aircraft.

response to a buyer’s request for un- • In a qualified local bus. dyed kerosene for use other than as a A credit or refund at a reduced rate may be • In a school bus. fuel in a diesel-powered highway vehi- allowable to an ultimate purchaser of

cle or train. aviation-grade kerosene taxed at the full rate • Exclusive use by a nonprofit educational

and used in commercial aviation (other than organization. The ultimate vendor (blocked pump) must be foreign trade). • Exclusive use by a state, political subdivi- registered by the IRS. See Publication 510 for a

discussion of the registration requirements. A credit or refund may be allowable to an sion of a state, or the District of Columbia.

ultimate purchaser of aviation-grade kerosene • In an aircraft or vehicle owned by an air- Registered ultimate vendor (blending for taxed at the commercial aviation rate and used craft museum. cold weather). This is a taxable fuel registrant in foreign trade.

Page 4 Chapter 1 Fuels
determine who bore the cost of the fuel. For

example, if the owner of a farm and the tenant Off-Highway Business 2. equally share the cost of gasoline that is used on

a farm for farming purposes, each can claim a Use (No. 2)

credit for the tax on one-half the fuel used.

Off-highway business use means fuel used in a Custom application of fertilizer and pesti- Definitions trade or business or in an income-producing cide. The use of fuel in the aerial or other activity other than as a fuel in a highway vehicle application of fertilizer, pesticides, or other sub- registered or required to be registered for use on stances is a use of fuel on a farm for farming This chapter provides definitions of the terms public highways. The terms , “highway vehicle”, purposes. In the case of gasoline, you, as the used in Table 1–1 for nontaxable uses. If appli- “public highway”, and “registered” are defined

cable, the type of use number from Table 1–1 is owner, tenant, or operator, may waive your right below. Do not consider any use in a boat as an

indicated in each heading. to be treated as the ultimate purchaser. If you off-highway business use.

waive your right, the applicator is treated as Off-highway business use includes fuels

having used the gasoline on a farm for farming used in any of the following ways.

purposes. See Chapter 14 of Pub. 225, • In stationary machines such as genera- On a Farm for Farming Farmer’s Tax Guide, for a sample waiver. tors, compressors, power saws, and simi- To waive your right to be treated as the Purposes (No. 1) lar equipment.

ultimate purchaser, you must take all the follow- • For cleaning purposes. ing actions. On a farm for farming purposes means fuel used • In forklift trucks, bulldozers, and in carrying on a trade or business of farming, on • Before the applicator files his or her claim, earthmovers. a farm in the United States, and for farming execute in writing an irrevocable agreepurposes. ment stating that you knowingly give up • For transmix (diesel fuel), the refining of

tax paid transmix into gasoline, diesel fuel, your right to the credit or refund. You may Farm. A farm includes livestock, dairy, fish, or kerosene. authorize an agent, such as a cooperative, poultry, fruit, fur-bearing animals, and truck to sign the waiver for you. farms, orchards, plantations, ranches, nur- Generally, this use does not include nonbusi- series, ranges, and feed yards for fattening cat- • Identify clearly the period the waiver cov- ness use of fuel, such as use by minibikes, tle. It also includes structures such as ers. snowmobiles, power lawn mowers, chain saws, greenhouses used primarily for the raising of and other yard equipment. agricultural or horticultural commodities. A fish The applicator must retain a copy of the farm is an area where fish are grown or raised waiver and give you a copy. Do not send a copy Example. Caroline owns a landscaping

— not merely caught or harvested. to the Internal Revenue Service unless re- business. She uses power lawn mowers and

quested to do so. chain saws in her business. The gasoline used Farming purposes. As an owner, tenant, or in the power lawn mowers and chain saws quali- operator, you use fuel on a farm for farming The waiver may be a separate document or it fies as fuel used in an off-highway business use. purposes if you use it in any of the following may appear on an invoice or another document The gasoline used in her personal lawn mower

ways. from the applicator. If the waiver appears on an at home does not qualify. invoice or other document, it must be printed in a 1. To cultivate the soil or to raise or harvest section clearly set off from all other material, and Highway vehicle. A highway vehicle is any any agricultural or horticultural commodity. it must be printed in type sufficiently large to put self-propelled vehicle designed to carry a load

2. To raise, shear, feed, care for, train, or over public highways, whether or not it is also you on notice that you are waiving your right to

manage livestock, bees, poultry, fur-bear- designed to perform other functions. Examples the credit or refund. If the waiver appears as part

ing animals, or wildlife. of an invoice or other document, it must be of vehicles designed to carry a load over public

signed separately from any other item that re- highways are passenger automobiles, 3. To operate, manage, conserve, improve, quires your signature. motorcycles, buses, and highway-type trucks or maintain your farm and its tools and and truck tractors. A vehicle is a highway vehicle equipment. The effective period of the waiver cannot even though the vehicle’s design allows it to extend beyond your tax year. When the period 4. To handle, dry, pack, grade, or store any perform a highway transportation function for covered by the waiver extends beyond the raw agricultural or horticultural commodity. only one of the following. applicator’s tax year, the applicator can only For this use to qualify, you must have pro- claim a credit or refund for fuel used in the part of • A particular type of load, such as passen- duced more than half the commodity so the waiver period included in the applicator’s tax gers, furnishings, and personal effects (as treated during the tax year. Commodity year. The applicator must wait until the next tax in a house, office, or utility trailer). means a single raw product. For example, year to file a claim for fuel used in the rest of the apples and peaches are two separate • A special kind of cargo, goods, supplies, waiver period. commodities. or materials.

Fuel not used for farming. Fuel is not used 5. To plant, cultivate, care for, or cut trees or • Some off-highway task unrelated to high- on a farm for farming purposes if it is used in any to prepare (other than sawing logs into way transportation, except as discussed of the following ways. lumber, chipping, or other milling) trees for next.

market, but only if the planting, etc., is inci- • Off the farm, such as on the highway or in dental to your farming operations. Your Vehicles not considered highway vehicles.

tree operations will be incidental only if noncommercial aviation, even if the fuel is Generally, the following kinds of vehicles are not used in transporting livestock, feed, crops, they are minor in nature when compared to considered highway vehicles for purposes of the

the total farming operations. or equipment. credit or refund of fuel taxes.

If any other person, such as a neighbor or • For personal use, such as mowing the 1. Specially designed mobile machinery custom operator, performs a service for you on lawn. for nontransportation functions. A

your farm for any of the purposes listed in (1) or • In processing, packaging, freezing, or can- self-propelled vehicle is not a highway ve- (2), you are considered to be the ultimate pur- ning operations. hicle if all the following apply. chaser that used the fuel on a farm for farming

purposes. However, see Custom application of • In processing crude gum into gum spirits a. The chassis has permanently mounted

fertilizer and pesticide, next. of turpentine or gum resin or in processing to it machinery or equipment used to

If doubt exists whether the owner, the tenant, perform certain operations (construc- maple sap into maple syrup or maple

or the operator of the farm bought the fuel, tion, manufacturing, drilling, mining, tim- sugar.

Chapter 2 Definitions Page 5
bering, processing, farming, or similar Example. The motor of a registered

operations) if the operation of the ma- concrete-mixer truck operates both the engine Buses

chinery or equipment is unrelated to and the mixing unit by means of a power

transportation on or off the public high- take-off. The fuel used in the motor to run the

ways. mixer is not off-highway business use. In Certain Intercity and Local

Use in separate motor. Off-highway busi- Buses (No. 5) b. The chassis has been specially designed to serve only as a mobile car- ness use includes fuel used in a separate motor In certain intercity and local buses means fuel riage and mount for the machinery or to operate special equipment, such as a refriger- used in a bus engaged in furnishing (for com- equipment, whether or not the machin- ation unit, pump, generator, or mixing unit. If you pensation) passenger land transportation avail- ery or equipment is in operation. draw fuel from the same tank that supplies fuel able to the general public. The bus must be to the propulsion motor, you must figure the c. The chassis could not, because of its engaged in one of the following activities. quantity used in the separate motor operating special design and without substantial the special equipment. You may make a reason- • Scheduled transportation along regular structural modification, be used as part able estimate based on your operating experi- routes. of a vehicle designed to carry any other ence and supported by your records. load. • Nonscheduled operations if the seating You can use devices that measure the miles capacity of the bus is at least 20 adults, d. The vehicle must have traveled less the vehicle has traveled (such as hubometers) not including the driver. Vans and similar than 7,500 miles on public highways to figure the gallons of fuel used to propel the vehicles used for van-pooling or taxi serv- during the owner’s taxable year. vehicle. Add to this amount the fuel consumed ice do not qualify. while idling or warming up the motor before

2. Vehicles specially designed for off-high- propelling the vehicle. The difference between

way transportation. A vehicle is not your total fuel used and the fuel used to propel Available to the general public. This means

treated as a highway vehicle if the vehicle is the vehicle is the fuel used in the separate mo- you offer service to more than a limited number

specially designed for the primary function tor. of persons or organizations. If a bus operator

of transporting a particular type of load other normally provides charter operations through

than over the public highway and because Example. Hazel owns a refrigerated truck. It travel agencies but has buses available for charof this special design, the vehicles’s capa- has a separate motor for the refrigeration unit. tering by the general public, this service is availbility to transport a load over a public high- The same tank supplies both motors. Using the able to the general public. A bus does not qualify

way is substantially limited or impaired. truck’s hubometer, Hazel figures that 90% of the when its operator uses it to provide exclusive

To make this determination, you can take fuel was used to propel the truck. Therefore, services to only one person, group, or organiza10% of the fuel is used in an off-highway busi- tion. Also, intercity bus transportation does not into account the vehicle’s size, whether the

vehicle is subject to licensing, safety, or ness use. include transporting students and employees of

other requirements, and whether the vehi- schools or intercity transportation in a qualified Fuel lost or destroyed. You cannot treat fuel

cle can transport a load at a sustained local bus. lost or destroyed through spillage, fire, or other

speed of at least 25 miles per hour. It does casualty as fuel used in an off-highway business

not matter that the vehicle can carry heavier use. For Diesel Fuel or Kerosene

loads off highway than it is allowed to carry in a Qualified Local Bus

over the highway. (No. 6)

3. Nontransportation trailers and semitrailers. A trailer or semi-trailer is not Export (No. 3) In a qualified local bus means fuel used in a bus

treated as a highway vehicle if it is spe- meeting all the following requirements.

cially designed to function only as an en- Export means fuel removed from the United • It is engaged in furnishing (for compensa- closed stationary shelter for carrying on a States with the intention that the fuel remain in a tion) intracity passenger land transporta- nontransportation function at an off-high- foreign country or possession of the United tion available to the general public. way site. For example, a trailer that is ca- States. Fuel is not exported if it is in the fuel

pable only of functioning as an office for an supply tank of a vehicle or aircraft. • It operates along scheduled, regular

off-highway construction operation is not a routes.

highway vehicle. • It has a seating capacity of at least 20

adults (excluding the driver). In a Boat Engaged in Public highway. A public highway includes • It is under contract with (or is receiving any road in the United States that is not a private Commercial Fishing more than a nominal subsidy from) any roadway. This includes federal, state, county, state or local government to furnish the and city roads and streets. (No. 4) transportation.

Registered. A vehicle is considered regis- In a boat engaged in commercial fishing means Intracity passenger land transportation. tered when it is registered or required to be fuel used in taking, catching, processing, or This is the land transportation of passengers registered for highway use under the law of any transporting fish, shellfish, or other aquatic life between points located within the same metro- state, the District of Columbia, or any foreign for commercial purposes, such as selling or politan area. It includes transportation along country in which it is operated or situated. Any processing the catch, on a specific trip basis. routes that cross state, city, or county bounda- highway vehicle operated under a dealer’s tag, They include boats used in both fresh and salt ries if the routes remain within the metropolitan license, or permit is considered registered. A water fishing. They do not include boats used for area. highway vehicle is not considered registered both sport fishing and commercial fishing on the

solely because a special permit allows the vehi- same trip. Under contract. A bus is under contract with a

cle to be operated at particular times and under state or local government only if the contract specified conditions. imposes a bona fide obligation on the bus operator to furnish the transportation. Dual use of propulsion motor. Off-highway

business use does not include any fuel used in More than a nominal subsidy. A subsidy is

the propulsion motor of a registered highway more than nominal if it is reasonably expected to

vehicle even though that motor also operates exceed an amount equal to 3 cents multiplied by

special equipment by means of a power take-off the number of gallons of fuel used in buses on

or power transfer. It does not matter if the spe- subsidized routes. A company that operates its

cial equipment is mounted on the vehicle. buses along subsidized and unsubsidized inPage 6 Chapter 2 Definitions
tracity routes may consider its buses qualified velopment or removal of, hard minerals, empt from income tax under section 501(a) of

local buses only when the buses are used on the the Internal Revenue Code that meets both of oil, or gas.

subsidized intracity routes. the following requirements. 2. Planting, cultivating, cutting, transporting,

or caring for trees (including logging opera- • It has a regular faculty and curriculum. In a School Bus (No. 7) tions). • It has a regularly enrolled body of students

In a school bus means fuel used in a bus en- 3. Providing emergency medical services. who attend the place where the instruction

gaged in the transportation of students or em- normally occurs. During a use described in items (1) and (2), ployees of schools. A school is an educational the helicopter must not take off from, or land at, organization with a regular faculty and curricu- A nonprofit educational organization also in- a facility eligible for assistance under the Airport lum and a regularly enrolled body of students cludes a school operated by a church or other and Airway Development Act of 1970, or other- who attend the place where the educational ac- organization described in section 501(c)(3) of

tivities occur. wise use services provided pursuant to section the Internal Revenue Code if the school meets

44509 or 44913(b) or subchapter I of chapter the above requirements.

471 of title 49, United States Code. For item (1),

treat each flight segment as a separate flight.

For Diesel Fuel and Fixed-wing air ambulance uses. Fixed-wing Exclusive Use by a Kerosene (Other Than air ambulance uses means fuel used by a

fixed-wing aircraft providing emergency medical State, Political Aviation-Grade services. The aircraft must be equipped for and Subdivision of a State, exclusively dedicated on that flight to acute care Kerosene) Used Other emergency medical services. or the District of

Than as a Fuel (No. 8) Columbia (No. 14)

Diesel fuel and kerosene (other than aviation For Aviation-Grade Exclusive use by a state, political subdivision of grade kerosene) used other than as a fuel in the a state, or the District of Columbia means fuel propulsion engine of a diesel-powered highway Kerosene Used Other purchased by the state or local government for vehicle or diesel-powered train (not including its exclusive use. A state or local government is off-highway business use), means undyed die- Than as a Fuel in the any state, any political subdivision thereof, or sel fuel and undyed kerosene used in the follow- the District of Columbia. An Indian tribal gov- ing ways: Propulsion Engine of ernment is treated as a state only if the fuel is

• For home heating, lighting, and cooking. used in an activity that involves the exercise of an Aircraft (No. 11) an essential tribal government function. Gaso- • In boats. line, diesel fuel, and kerosene used by the Aviation-grade kerosene used other than as a • For any of the following nonbusiness uses. American Red Cross is considered to be the use fuel in the propulsion engine of an aircraft means of these fuels by a state. aviation-grade kerosene used in the following 1. In stationary machines, such as generators ways. and compressors.

• In stationary machines, such as genera- 2. For cleaning purposes. tors and compressors. In an Aircraft or

3. In minibikes and snowmobiles. • For cleaning purposes. Vehicle Owned by an • In vehicles. Aircraft Museum

In Foreign Trade (No. 15)

(No. 9) In an aircraft or vehicle owned by an aircraft In a Highway Vehicle museum means fuel used in an aircraft or vehiIn foreign trade means fuel used in civil aircraft Owned by the United cle that is owned by an organization that meets

employed in foreign trade or trade between the all the following requirements.

United States and any of its possessions. In the States That is Not Used 1. It is exempt from income tax as an organi- case of aircraft registered in a foreign country, zation described in section 501(c)(3) of the the country must allow reciprocal benefits for on a Highway (No. 12) Code. aircraft registered in the United States.

In a highway vehicle owned by the United States 2. It is operated as a museum under a state

that is not used on a highway means fuel used in (or District of Columbia) charter.

a vehicle was not used on public highways dur- 3. It is operated exclusively for acquiring, ex- Certain Helicopter and ing the period covered by the claim. This use hibiting, and caring for aircraft of the type applies whether or not the vehicle is registered used for combat or transport in Fixed-Wing Air or required to be registered for highway use. World War II.

Ambulance Uses The aircraft or vehicle (such as a ground

servicing vehicle for aircraft) must be used ex- (No. 10) Exclusive Use by a clusively for the purposes described in item (3).

Certain helicopter uses. Certain helicopter Nonprofit Educational

uses means fuel used by a helicopter for any of

the following purposes. Organization (No. 13)

1. Transporting individuals, equipment, or Exclusive use by a nonprofit educational organisupplies in the exploration for, or the de- zation means fuel used by an organization exChapter 2 Definitions Page 7
and when to include the credit or refund in your b. The ultimate purchaser of

income. aviation-grade kerosene used for a non- In Military Aircraft taxable use may waive its right to make

(No. 16) a claim by providing a waiver that is

signed under penalties of perjury by a

In a military aircraft means fuel used in an air- General Information person authorized to bind the ultimate

craft owned by the United States or any foreign purchaser and is in the same format as

nation and constituting a part of its armed forces. Generally, you will provide all the information the Model Waiver C on page 17. A new

needed to claim a credit or refund when you waiver is required each year or when

properly complete Form 8849, Form 4136, or any information in the current waiver

Form 720 (Schedule C). In some cases, you will expires.

For Use in the have to attach additional information. You need c. The ultimate purchaser of undyed die- to keep records that support your claim for a sel fuel or undyed kerosene used in Production of Special credit or refund. certain intercity and local buses may

Keep at your principal place of busi- waive its right to make a claim by pro- Fuels (No. 17) ness all records needed to enable the viding a waiver that is signed under

IRS to verify that you are the person penalties of perjury by a person author- RECORDS

For use in the production of special fuels means entitled to claim a credit or refund and the ized to bind the ultimate purchaser and used to produce any liquid fuel (including LPG or amount you claimed. is in the same format as the Model liquefied natural gas) that is not gas oil, fuel oil, Waiver E on page 19. A new waiver is or a product taxable under section 4081. Ultimate purchaser. Ultimate purchasers required each year or when any informay make claims for the nontaxable use of fuels mation in the current waiver expires.

on Form 4136, Form 8849 (Schedule 1), and

Form 720 (Schedule C) if reporting excise tax In Commercial Aviation Registered ultimate vendor. Registered ulti- liability on that return. If you are an ultimate

purchaser, you must keep the following records. mate vendors may make claims for certain sales (Other Than Foreign of fuels on Form 4136, Form 8849 (Schedule 1), • The number of gallons purchased and Trade) and Form 720 (Schedule C) if reporting excise used during the period covered by your tax liability on that return. If you are a registered claim. ultimate vendor, you must keep certain informa- In commercial aviation (other than foreign trade) • The dates of the purchases. tion pertaining to the sale of the fuel. means fuel used in an aircraft in the business of

To make a claim, you must have sold the fuel transporting persons or property by air for com- • The names and addresses of suppliers at a tax-excluded price, repaid the tax to the pensation or hire. However, commercial aviation and amounts purchased from each in the buyer, or obtained the buyer’s written consent to does not include any of the following. period covered by your claim. the allowance of the claim. You are required to • Any use of an aircraft that has a maximum • The nontaxable use for which you used have a valid certificate or waiver in your posses- certificated takeoff weight of 6,000 pounds the fuel. sion in order to make the claim.

or less unless the aircraft is operated on In addition, you must have a registration • The number of gallons used for each non- an established line. number that has not been revoked or sus- taxable use. • Any use exclusively for the purpose of pended. You can get a registration number from

skydiving. It is important that your records show separately the IRS by completing Form 637, Application for the number of gallons used for each nontaxable Registration (For Certain Excise Tax Activities), • Any use of an aircraft owned or leased by use that qualifies as a claim. If the fuel is ex- and providing the information requested in its a member of an affiliated group and un- ported, you must have proof of exportation. instructions. available for hire by nonmembers of the

group. The determination of whether an For more information about keeping records, Farming and state use. To make a claim

see Publication 583, Starting a Business and aircraft is available for hire by nonmem- as an ultimate vendor (farming or state), you

bers is made on a flight-by-flight basis. Keeping Records, or Publication 552, Record- must have a UV registration number. If you sell keeping for Individuals. undyed diesel fuel, undyed kerosene, or

aviation-grade kerosene for use on a farm for Exceptions. farming purposes or for use by a state or local

government, you must keep the following infor- Use in a Train 1. The ultimate purchaser may not claim a mation. credit or refund for undyed diesel fuel, undyed kerosene, or aviation-grade kerosene Use in a train means fuel used in the propulsion • The name and taxpayer identification sold for the exclusive use of a state or engine of equipment or machinery that rides on number of each person (farmer, custom local government; or for use on a farm for rails. This includes use in a locomotive, work harvester, or government unit) that bought farming purposes or train, switching engine, and track maintenance the fuel.

machine. 2. The ultimate purchaser may not claim a • The number of gallons sold to each per- credit or refund if it has waived its right to a son. claim for credit or refund as follows. • An unexpired certificate from the buyer.

a. The ultimate purchaser of gasoline or See Model Certificate B on page 16. The

aviation gasoline used by a state or lo- certificate expires on the earlier of one

cal government for its exclusive use or year after the date of the certificate or the 3. a by nonprofit educational organization date a new certificate is given to the regisfor its exclusive may waive its right to tered ultimate vendor.

make a claim by providing a certificate

that is signed under penalties of perjury Nonprofit educational organization and Filing Claims by a person authorized to bind the ulti- state use. To make a claim as an ultimate

mate purchaser and is in the same for- vendor (nonprofit educational organization or

This chapter tells you how and when to make a mat as the Model Certificate D on page state), you must have a UV registration number.

claim for a credit or refund of excise taxes on 18. A new certificate is required each If you sell gasoline or aviation gasoline to a

fuels. This chapter also covers recordkeeping year or when any information in the cur- nonprofit educational organization for its exclurequirements, interest and penalty provisions, rent certificate expires. sive use or to a state or local government for its

Page 8 Chapter 3 Filing Claims
exclusive use, you must keep the following infor- quarter (for which no other claim has been filed) • The date of each sale. mation. during the tax year.

• The name and address of the buyer. If you cannot claim at least $750 at the end of • The name and taxpayer identification a quarter, you carry the amount over to the next number of each person (nonprofit educa- • The number of gallons sold to the buyer. quarter of your tax year to determine if you can tional organization or government unit) • A copy of the waiver signed by the buyer claim at least $750. If you cannot claim at least that bought the fuel. at the time the credit or payment is $750 at the end of your tax year, you must claim

• The number of gallons sold to each per- claimed. See Model Waiver C on page 17. a credit on your income tax return using

son. Form 4136.

• An unexpired certificate from the buyer. Taxpayer identification number. To file a Use in mobile machinery. An ultimate purSee Model Certificate D on page 18. The claim, you must have a taxpayer identification chaser may only make an annual claim for

certificate expires on the earlier of one number. Your taxpayer identification number off-highway business use in mobile machinery.

year after the date of the certificate or the can be any of the following.

date a new certificate is given to the regis- How to file. File the claim for refund by filling

tered ultimate vendor. • Employer identification number (EIN). out Schedule 1 (Form 8849) and attaching it to

Form 8849. Send it to the address shown in the • Social security number (SSN).

Blocked pump. To make a claim as an ulti- instructions. Only one claim may be filed for a

mate vendor (blocked pump), you must have a • Individual taxpayer identification number quarter.

UP registration number. If you sell undyed ker- (ITIN), if you are an alien individual and do

osene (other than aviation-grade kerosene) not have and are not eligible to get an Example. You purchased gasoline and unfrom a pump that qualifies as a blocked pump SSN. dyed diesel fuel. For the first quarter of your tax

because it is locked by you after each sale and is year, the excise tax on fuel you use for an

unlocked by you at the request of the buyer, you If you normally file only a U.S. individual in- off-highway business use is $184 for gasoline

must keep the following information for each come tax return (such as Form 1040 or and $244 for diesel fuel. You cannot file a claim

sale of more than 5 gallons. 1040NR), use your SSN or ITIN. You get an for refund since the total ($428) is less than

SSN by filing Form SS-5, Application for a Social $750. • The date of each sale. Security Card, with the Social Security Adminis- For the second quarter, the excise tax on fuel

tration. To get an ITIN, file Form W-7, Applica- you use for an off-highway business use is $92 • The name and address of the buyer.

tion for IRS Individual Taxpayer Identification for gasoline and $244 for diesel fuel. You add • The number of gallons sold to that buyer. Number, with the IRS. the amount from the first quarter ($428) to the

total amount from the second quarter ($336) and If you operate a business, use your EIN. If Blending for extreme cold. To make a determine you can file a claim for refund since you do not have an EIN, you may apply for one claim, you must be a taxable fuel registrant, a the total is $764. online. Go to the IRS website at www.irs.gov/ registered ultimate vendor, or a registered ultimate vendor (blocked pump). If you sell undyed businesses/small/ and click on the “Employer ID When to file. You must file a quarterly claim

kerosene (other than aviation-grade kerosene) Numbers (EINs)” link. You may also apply for an by the last day of the first quarter following the EIN by telephone by calling 1-800-829-4933, or for blending with diesel fuel in an area under a last quarter included in the claim. If you do not

declaration of extreme cold and the blend will be you can fax or mail Form SS-4, Application for file a timely refund claim for any quarter of your

sold for use or used for heating purposes, you Employer Identification Number, to the IRS. tax year, you will have to claim a credit for that

must keep the following information. amount on your income tax return, as discussed

earlier. • The number of gallons sold to each per- Generally, an annual claim must be made son. Claiming a Refund on Form 4136 (as discussed under Claiming a

• An unexpired certificate from the buyer for Credit on Form 4136 later). However, the followeach purchase of kerosene. See Model Generally, you may claim a refund on Form ing must use Schedule 1 (Form 8849) to file an

Certificate A on page 15. 8849. Complete and attach to Form 8849 the annual claim.

appropriate Form 8849 schedules. However, if • The United States. Certain intercity and local bus use. To you file Form 720, you can use the Schedule C make a claim as an ultimate vendor of undyed portion of Form 720 for your refund claims for • A state, political subdivision of a state, and

diesel fuel or undyed kerosene used in certain the District of Columbia. the quarter. See the Form 720 instructions. Do intercity and local buses, you must have a UB not claim a refund on Form 8849 for any amount • An organization exempt from income tax registration. Current UV registrants will be able for which you have filed or will file a claim on under section 501(a) of the Internal Reve- to file registered ultimate vendor claims for un- Schedule C (Form 720) or Form 4136. nue Code that is not required to file an dyed diesel fuel or undyed kerosene used in Alcohol fuel mixture credits and biodiesel income tax return. certain intercity or local buses until June 30, mixture credits must be taken on Schedule C 2005. You must keep the following information: (Form 720) against your taxable fuel liability. To

• The date of each sale. the extent the alcohol fuel mixture credit and Registered Ultimate Vendors

biodiesel mixture credit exceed taxable fuel lia- • The name and address of the buyer. If you are a registered ultimate vendor, you can bility, a payment is allowed and may be taken as make a claim for refund of the excise tax on fuel • The number of gallons sold to the buyer. a credit on Schedule C (Form 720), as a refund that you sold for certain uses. Complete Form on Schedule 3 (Form 8849), or as an income tax • A copy of the waiver signed by the buyer 8849 and Schedule 2 (including line 6 or line 7, if credit on Forms 4136, 6478, or 8864 as applica- at the time the credit or payment is applicable) to make the claim. See Chapter 1. ble. Only one claim may be made for any partic- claimed. See Model Waiver E on page 19. Fuels. ular amount of alcohol or biodiesel.

Aviation-grade kerosene. To make a claim Undyed diesel fuel. You must meet the folas an ultimate vendor of aviation-grade ker- Ultimate Purchasers lowing requirements for this claim.

osene for a nontaxable use or use in commercial • The claim must be for undyed diesel fuel aviation (other than foreign trade), you must If you are an ultimate purchaser, you may claim sold for use on a farm for farming pur- have a UA registration number. See a refund for the excise tax on fuels you purchase poses or by a state or local government Aviation-grade kerosene on page 4 for a list of and use for a nontaxable use. You may file a (including essential government use by an nontaxable uses. Current UV registrants will be claim for refund for any quarter of your tax year Indian tribal government). able to file registered ultimate vendor claims for for which you can claim at least $750. This

aviation-grade kerosene until June 30, 2005. amount is the excise tax on all fuels used for a • The claim must be for sales during a peYou must keep the following information: riod of at least 1 week. nontaxable use during that quarter or any prior

Chapter 3 Filing Claims Page 9
• The claim must be for at least $200. shown in the instructions. Write “Registered Ulti- credit on his or her income tax return for the

Claims for sales by a registered ultimate mate Vendor Claim” on the envelope. partners share of the fuel used by the partnervendor of undyed kerosene and ship. Do not combine this claim with any aviation-grade kerosene can be combined other claim on Form 8849. Other entities. Corporations, S corpora- with claims for sales of undyed diesel fuel tions, farmers’ cooperative associations, and CAUTION

!

to meet this requirement. trusts must make the claim on the line for “credit

for Federal tax paid on fuels” of the applicable

Undyed kerosene (other than aviation-grade When to file. The claim must be filed by the income tax return.

kerosene). You must meet the following re- last day of the first quarter following the earliest Federal, state, and local governments, and quirements for this claim. quarter included in the claim. If you do not meet certain tax-exempt organizations (as discussed

• The claim must be for undyed kerosene the requirements or fail to file a timely quarterly earlier under Claiming a Refund) must use Form

refund claim, you will have to make a claim for a 8849, not Form 4136, to make an annual claim. sold for use on a farm for farming pur- credit on Form 4136. poses, for use by a state or local government, from a blocked pump, or for

blending with diesel fuel to be used for

heating purposes. Interest Claiming a Credit on • The claim must be for sales during a pe- IRS pays no interest on refunds described in this riod of at least 1 week. Form 4136 publication other than refunds to registered ulti-

• The claim must be for at least $100. Only mate vendors (discussed earlier) not paid within A credit may be claimed on Form 4136 when claims for sales by a registered ultimate 45 days. Refunds resulting from credits claimed you file your income tax return at the end of the vendor of undyed kerosene can be used on income tax returns may qualify for interest. year. If you meet certain requirements (dis- to meet this requirement. cussed earlier), you may be able to make a

claim during the year.

Aviation-grade kerosene. You must meet

the following requirements for this claim. Credit only. You can claim the following Penalties

taxes only as a credit on Form 4136.

• The claim must be for aviation-grade ker- There are criminal penalties for false or fraudu- • Tax on gasoline or aviation gasoline used osene sold to the buyer for a nontaxable lent claims. In addition, any person who files a on a farm for farming purposes. use or any use in commercial aviation, if refund claim, discussed earlier, for an excessive the ultimate purchaser has waived the • Tax on fuels used for nontaxable uses if amount (without reasonable cause) may have to right to make the claim; or the claim must the total for the tax year is less than $750. pay a penalty. An excessive amount is the be for aviation-grade kerosene sold for • Tax on fuel you did not include in any amount claimed that is more than the allowable

use on a farm for farming purposes or for claim for refund (discussed above) previ- amount. The penalty is the greater of two times use by a state or local government. ously filed for any quarter of the tax year. the excessive amount or $10.

• The claim must be for sales during a pe- The penalty for failure to register if you are • Tax on fuel you used in mobile machinery riod of 1 week. required to register, unless due to reasonable (off-highway business use) that traveled cause, is increased to $10,000 for the initial • The claim must be for at least $200. less than 7,500 miles. failure, and then $1,000 each day thereafter you Claims for sales by registered ultimate fail to register. vendors of undyed diesel fuel and undyed Do not claim a credit for any amount for which

kerosene can be combined with claims for you have filed a refund claim on Form 8849 or

sales by registered ultimate vendors of credit on Form 720 (Schedule C).

aviation-grade kerosene to meet this requirement. When to file. You can claim a fuel tax credit on Including the Credit your income tax return for the year you used the

fuel (or sold the fuel in the case of a registered or Refund in Income Undyed diesel fuel or undyed kerosene used ultimate vendor claims). in certain intercity and local buses. You Include any credit or refund of excise taxes on must meet the following requirements for this You may be able to make a fuel tax fuels in your gross income if you claimed the claim on an amended income tax re- claim. There is no minimum amount to make this total cost of the fuel (including the excise taxes) turn for the year you used the fuel. claim.

TIP

as an expense deduction that reduced your in- Generally you must file an amended return by come tax liability. • The claim must be for undyed diesel fuel the later of 3 years from the date you filed your

or undyed kerosene used in certain inter- The year you include a credit or refund in original return or within 2 years from the date

city or local buses. gross income depends on whether you use the you paid the income tax. cash or an accrual method of accounting. • The claim must be for sales during a pe- How to claim a credit. How you claim a credit riod of at least 1 week. depends on whether you are an individual, part- Cash method. If you use the cash method

nership, corporation, S corporation, or farmers’ and file a claim for refund, include the refund

Gasoline and aviation gasoline. You must cooperative association. amount in your gross income for the tax year in

meet the following requirements for this claim. which you receive the refund. If you claim a Individuals. You claim the credit on the credit on your income tax return, include the • The claim must be for gasoline or aviation “Other payments from” line of Form 1040. Also credit amount in gross income for the tax year in gasoline sold to a state for its exclusive check box b on that line. If you would not other- which you file Form 4136. If you file an amended use or to a nonprofit educational organiza- wise have to file an income tax return, you must return and claim a credit, include the credit tion for its exclusive use. do so to get a fuel tax credit. amount in gross income for the tax year in which

• The claim must be for sales during a pe- Partnership. Partnerships (other than you receive the credit.

riod of 1 week. electing large partnerships) claim the credit by

including a statement on Schedule K-1 (Form Example 1. Sharon Brown, a cash basis • The claim must be for at least $200. 1065), Partner’s Share of Income, Deductions, farmer, filed her 2004 Form 1040 on March 3,

Credits, etc., showing each partners share of the 2005. On her Schedule F, Sharon deducted the

How to file. File registered ultimate vendor number of gallons of each fuel sold or used for a total cost of gasoline (including $110 of excise

claims by filling out Schedule 2 (Form 8849) and nontaxable use, the type of use, and the applica- taxes) used on the farm. Then, on Form 4136,

attaching it to Form 8849. Send it to the address ble credit per gallon. Each partner claims the Sharon claimed the $110 as a credit. Sharon

Page 10 Chapter 3 Filing Claims
reports the $110 as additional income on her cles were not registered (or required to be You, as the producer of the mixture, must

2005 Schedule F. registered) for highway use. In the fourth quarter either sell the mixture for use as a fuel to another

of his 2004 income tax year, which ends in person or use the mixture as a fuel in your trade

Example 2. March Corporation uses the December, he used 3,000 gallons of undyed or business. Take into account alcohol you use

calendar year as its tax year. For 2004, the diesel fuel. The excise tax on the 3,000 gallons to produce a qualified mixture only if the sale or

following amounts of excise tax were included in of undyed diesel fuel he used was $732 (24.4 use is in your trade or business.

the cost of gasoline the corporation used each cents per gallon). Alcohol. For purposes of the alcohol fuel mix- quarter in a nontaxable use: Because the tax is less than $750, Tyler ture credit, alcohol includes methanol and etha- must claim a credit for the tax on his 2004 nol. It also includes an alcohol gallon of ethyl income tax return. He fills out Form 4136 and tertiary butyl ether (ETBE) or other ethers pro- January 1 through March 31 ....... $1,300 attaches it to his 2004 income tax return, which duced from such alcohol and methanol pro- April 1 through June 30 he files in 2005. He enters the $732 on line 69 of ........... 1,100 duced from methane gas formed in waste his Form 1040 and checks box b.

July 1 through September 30 . . . . . . . 400 disposal sites. But it does not include any of the Tyler uses the cash method of accounting. following. October 1 through December 31 . . . . . 300 On his 2004 Schedule C (Form 1040), he deducts the total cost of the fuel, including the tax. • Alcohol produced from petroleum, natural Total $3,100 When Tyler files his 2005 Form 1040, he will gas, or coal (including peat).

The corporation deducts the entire cost of include the $732 credit shown on his 2004 Form • Alcohol with a proof of less than 190 (150 the gasoline (including the $3,100 in excise 4136 as additional income on his Schedule C proof for purposes of a mixture credit taxes) it used during the year as a business (Form 1040) for 2005. taken under section 40 on Form 6478). In expense on its corporation income tax return, Example, continued. For the first two figuring the proof of any alcohol, disregard thereby reducing its corporate income tax liabil- quarters of 2005, Tyler’s records show the fol- any denaturants (additives that make the ity for that year. lowing. alcohol unfit for human consumption). Form 8849. March Corporation files quarterly refund claims for the first two quarters (end- Claim Volume of alcohol. When figuring the num- ing March 31 and June 30). It cannot file a Quarter Gallons Used Tax Rate Amount ber of gallons of alcohol sold or used, include the quarterly refund claim for the third or fourth quar- volume of any denaturant (including gasoline) First 2,750 .244 $671 ter because it did not meet the $750 minimum Second 2,500 .244 610 added under formulas approved by the Secre- requirement. tary of the Treasury. Also include the denaturant Since March Corporation uses the cash Tyler could not file a claim for a refund for the when you figure the percentage of any mixture method of accounting, the corporation includes first quarter because the amount of the claim that is alcohol. However, denaturants can be $2,400 ($1,300 + $1,100) in its gross income for was less than $750. He adds the first quarter counted only up to 5% of the total volume of the tax year in which it receives the refunds amount ($671) to the second quarter amount alcohol and denaturant combined. (2004). ($610) and claims a refund of $1,281 by filing

Form 4136. The corporation claims the re- Separation or failure to use as fuel. If the Form 8849 and Schedule 1 (Form 8849). The maining amounts ($400 + $300) as a credit on credit applied to alcohol used in the production claim must be filed by September 30, 2005

its 2004 income tax return by attaching Form which is the last day of the first quarter (July - of a qualified mixture, and you later separate the

4136. It files its tax return in 2005. It includes this Sept.) following the last quarter (April - June) alcohol from the mixture or do not use the mixcredit ($700) in its 2005 gross income. ture as fuel, you must pay a tax equal to the included in the claim. He will have to include the

credit. Report this tax on Form 720. Accrual method. $1,281 excise tax refund as additional income If you use an accrual

method, include the amount of credit or refund in on his Schedule C (Form 1040) for 2005. Gasoline tax on the alcohol in an alcohol fuel

gross income for the tax year in which you used mixture. Persons who blend alcohol with gasthe fuels (or sold the fuels if you are a registered oline, diesel fuel, or kerosene to produce an

ultimate vendor). It does not matter whether you alcohol fuel mixture outside the bulk transfer

filed for a quarterly refund or claimed the entire terminal system must pay must pay the gasoline

amount as a credit. tax on the volume of alcohol in the mixture. See

Form 720 to report this tax. You also must be 4. Example 3. Patty Green uses an accrual registered with the IRS as a blender. See

method. She files her 2004 return on April 15, Form 637.

2005. On Schedule C (Form 1040) she deducts How to claim the credit. Any alcohol mixture the total cost of gasoline (including $155 of ex- Alcohol Fuel credit must first be taken against your taxable cise taxes) used for an off-highway business fuel liability on Form 720. Any excess credit may use during 2004. On Form 4136, Patty claims Mixture Credit be taken on Schedule C (Form 720), Form 8849, the $155 as a credit. She reports the $155 as Form 4136, or Form 6478. See Notice 2005-4 additional income on her 2004 Schedule C. for more information.

Beginning January 1, 2005, the procedures for Example 4. Use the same facts as in Exam- making a claim for most alcohol-blended fuels Claiming the excess credit. Instead of

ple 2 above, except that March Corporation waiting until the end of the quarter when you file have been changed. Special rules determine the uses an accrual method of accounting. Since Form 720 to claim any excess alcohol fuel mix- order in which these claims can be made. Only the nontaxable use occurred in 2004, the corpo- ture credit, you may be able to file Form 8849 one claim may be made for any amount of alco- ration reports the $3,100 of excise taxes as (Schedule 3) during the quarter. For more infor- hol used to make an alcohol fuel mixture.

income on its 2004 income tax return. This con- mation, see Form 8849 (Schedule 3) and

sists of the $2,400 it claimed on Form 8849 and Alcohol fuel mixture credit. You can take a Form 720.

credit for the alcohol you use to produce a quali- the $700 it claimed on Form 4136.

fied mixture. A qualified mixture is a mixture of

alcohol with gasoline, diesel fuel, or kerosene.

You do not treat adding denaturants to alcohol

Example as the production of a mixture.

Tyler S. Sands used undyed diesel fuel in vehicles used in his construction business. The vehiChapter 4 Alcohol Fuel Mixture Credit Page 11
mixture outside the bulk transfer terminal sys- A special fuel includes any liquid fuel, other

tem must pay the diesel fuel tax on the volume of than gasoline, suitable for use in an internal

biodiesel in the mixture. See Form 720 to report combustion engine. 5. this tax. You also must be registered with the Mixing or failure to use as fuel. If the credit IRS as a blender. See Form 637. applied to alcohol you bought and you later mix

the alcohol or do not use it as a fuel, you must Biodiesel How to claim the credit. Any biodiesel mix- pay a tax equal to the credit. Report this tax on ture credit must first be taken against your tax- Form 720.

able fuel liability on Form 720. Any excess credit (Including may be taken on Schedule C (Form 720), Form Amount of credit. The straight alcohol credit

8849, Form 4136, or Form 8864. See Notice is based on the proof content of the alcohol. You Agri-biodiesel) 2005-4 for more information. figure the proof without considering denaturants

added to the alcohol. Use Form 6478 to deter- Claiming the excess credit. Instead of mine the credit for each gallon of alcohol. Mixture Credit waiting until the end of the quarter when you file If you combine alcohol eligible for the credit Form 720 to claim any excess biodiesel mixture with alcohol that is not eligible and use the com- credit, you may be able to file Form 8849 Beginning January 1, 2005, the procedures for bined alcohol in a way that qualifies for the (Schedule 3) during the quarter. For more infor- making a claim for most alcohol-blended fuels credit, you figure the credit based on the propor- mation, see Form 8849 (Schedule 3) and have been changed. Special rules determine the tionate amount of eligible alcohol contained in Form 720. order in which these claims can be made. Only the combined alcohol.

one claim may be made for any amount of bi- Volume of alcohol. When figuring the num- odiesel used to make a biodiesel fuel mixture. ber of gallons of alcohol sold or used, include the See How to claim the credit later. volume of any denaturant (including gasoline)

added under formulas approved by the Secre- Biodiesel mixture credit. You can take the

tary of the Treasury. Also include the denaturant credit for biodiesel you use to produce a quali- 6. when you figure the percentage of any mixture fied mixture. A qualified mixture is a mixture of that is alcohol. However, denaturants can be biodiesel with diesel fuel without regard to ker- counted only up to 5% of the total volume of osene. alcohol (including denaturants). You can take the credit only for a mixture you

produce. You must sell the mixture to any per- Alcohol Fuel Small ethanol producer credit. If you are an son for use as a fuel, or use it as a fuel in your eligible small ethanol producer, you qualify for a trade or business. Take into account biodiesel Credit credit on up to 15 million gallons of your qualified you use to produce a qualified mixture only if the ethanol fuel production for any tax year. This sale or use is in your trade or business. additional alcohol fuel credit is 10 cents for each You cannot take a credit for the casual If you sell or use alcohol (not in a mixture) as a gallon. off-farm production of a qualified biodiesel mix- fuel, you may be eligible for a general business You are an eligible small ethanol producer if, credit on your income tax return. The alcohol ture. at all times during the tax year, you have an fuel credit consists of the straight alcohol credit, Biodiesel. Biodiesel means the monoalkyl es- annual productive capacity of not more than 30 the alcohol fuel mixture credit, and the small million gallons of any type of alcohol. ters of long chain fatty acids derived from plant ethanol producer credit. The alcohol fuel mixture or animal matter which meet the registration For a partnership, trust, or S corporation, the credit was discussed in Chapter 4 earlier. requirements for fuels and fuel additives estab- 15- and 30-million gallon limits apply at both the Alcohol eligible for the credit includes metha- lished by the Environmental Protection Agency entity level and the partner, beneficiary, or nol and ethanol. This includes methanol pro- (EPA) under section 211 of the Clean Air Act, shareholder level.

duced from methane gas formed in waste and the requirements of the American Society of disposal sites. But it does not include any of the Qualified ethanol fuel production. Your

Testing Materials D6751. qualified ethanol fuel production is any ethanol following.

Agri-biodiesel. Agri-biodiesel means bi- you produce and sell during the tax year to

• Alcohol produced from petroleum, natural another person for any of the following pur- odiesel derived solely from virgin oils, including gas, or coal (including peat). poses. esters derived from virgin vegetable oils from

corn, soybeans, sunflower seeds, cottonseeds, • Alcohol with a proof of less than 150. • Use in the production of a qualified mix- canola, crambe, rapeseeds, safflowers, flax- ture in that person’s trade or business (ex- • Ethanol produced as a by-product from seeds, rice bran, and mustard seeds, and from cept casual off-farm production). animal fats. manufacturing ethylcellulose derived from

ethane. • Use as a fuel in that person’s trade or

Certification. You must obtain and keep as business. In figuring the proof of any alcohol, disregard part of your records a certification to you from any denaturants (additives that make the alco- • Sale at retail by that person who puts the the producer or importer of the biodiesel. The hol unfit for human consumption). ethanol in the fuel tank of the buyer’s vehi- certificate is required for any biodiesel fuel credit cle. claimed. The certificate must identify the product Straight alcohol credit. You can claim the produced and the percentage of biodiesel and credit for any alcohol not mixed with gasoline or It also includes your use or sale of the ethanol agri-biodiesel in the product. If the producer or a special fuel other than denaturants. for these purposes. importer of the biodiesel is also the taxpayer You are eligible for the credit for straight Qualified ethanol fuel production does not claiming the biodiesel credit, the certificate is alcohol only if you met one of the following include any alcohol bought by a producer who required. See Model Certificate F on page 20. then increases the proof of the alcohol by addi- requirements during the tax year. Separation or failure to use as fuel. If the tional distillation.

credit applied to biodiesel used in the production • You used it as a fuel in your trade or Cooperative election to allocate the small of a qualified mixture, and you later separate the business. ethanol producer credit to patrons. For tax biodiesel from the mixture or do not use the • You sold it at retail and placed it in the fuel years ending after October 22, 2004, a coopera- mixture as fuel, you must pay a tax equal to the tank of the buyer’s vehicle. tive described in section 1381(a) can elect to credit. Report this tax on Form 720. allocate any part of the small ethanol producer

Diesel fuel tax on the biodiesel in a biodiesel The buyer cannot claim the credit for the alco- credit to patrons of the cooperative. The credit is

fuel mixture. Persons who blend biodiesel allocated among the patrons on the basis of the hol bought at retail, even if the buyer uses it as a

with undyed diesel fuel to produce a biodiesel quantity or value of business done with or for the fuel in a trade or business.

Page 12 Chapter 6 Alcohol Fuel Credit
patrons for the tax year. For more information, You are eligible for the credit for straight To contact your Taxpayer Advocate:

see Form 6478. biodiesel only if you met one of the following • Call the Taxpayer Advocate toll free at requirements during the tax year. Failure to use for qualifying purposes. If 1-877-777-4778.

the credit applied to an eligible small ethanol • You used it as a fuel in your trade or • Call, write, or fax the Taxpayer Advocate producer and you do not use the ethanol for a business.

office in your area. purpose listed under Qualified ethanol fuel pro- • You sold it at retail and placed it in the fuel duction, you must pay a tax equal to the credit. • Call 1-800-829-4059 if you are a tank of the buyer’s vehicle. Report this tax on Form 720. TTY/TDD user.

The credit is not allowed for biodiesel (or • Visit the website at www.irs.gov/advocate. How to claim the credit. You take the alcohol agri-biodiesel) you used as a fuel in a trade or fuel credit by completing Form 6478 and attach- business if that biodiesel (or agri-biodiesel) was For more information, see Publication 1546, ing it to your income tax return. All individuals sold to you in a retail sale described above. The Taxpayer Advocate Service of the IRS. and corporations taking the credit use Form

6478. Partnerships (including electing large Mixing or failure to use as fuel. If the credit

applied to biodiesel you bought and you later Free tax services. To find out what services partnerships), S corporations, estates, and mix the biodiesel or do not use it as a fuel, you are available, get Publication 910, Guide to Free trusts figure the credit on Form 6478 but divide must pay a tax equal to the credit. Report this tax Tax Services. It contains a list of free tax publi- the credit among their partners, shareholders, or on Form 720. cations and an index of tax topics. It also de- beneficiaries.

scribes other free tax information services, If you take the alcohol fuel credit, you must How to claim the credit. You take the bi- including tax education and assistance pro- include the credit for the tax year in your gross odiesel fuel credit by completing Form 8864 and grams and a list of TeleTax topics. income for that year. attaching it to your income tax return. All individ- Form 6478 is the only form on which you can Internet. You can access the IRS web- uals and corporations taking the credit use Form claim the straight alcohol fuel credit and the site 24 hours a day, 7 days a week at 8864. Partnerships (including electing large

small ethanol producer credit. www.irs.gov to: partnerships), S corporations, estates, and

General business credit. You combine the trusts figure the credit on Form 8864 but divide • Download forms, instructions, and publicathe credit among their partners, shareholders, or alcohol fuel credit with other credits on Form tions.

beneficiaries. 3800, General Business Credit, to figure your • Order IRS products online. If you take the biodiesel fuel credit, you must general business credit for the year. See the

Form 3800 instructions for a list of these credits include the credit for the tax year in your gross • See answers to frequently asked tax quesincome for that year. and whether you must file Form 3800. tions.

Form 8864 is the only form on which you can • Search publications online by topic or claim the straight biodiesel fuel credit. keyword. General business credit. You combine the • Send us comments or request help by biodiesel fuel credit with other credits on Form

email. 3800, General Business Credit, to figure your

7. general business credit for the year. See the • Sign up to receive local and national tax Form 3800 instructions for a list of these credits news by email. and whether you must file Form 3800. • Get information on starting and operating

a small business. Biodiesel

Fax. You can get over 100 of the most (Including requested forms and instructions 24 8. hours a day, 7 days a week, by fax. Agri-biodiesel) Just call 703-368-9694 from your fax machine.

Follow the directions from the prompts. When

How To Get Tax you order forms, enter the catalog number for Fuel Credit the form you need. The items you request will be

faxed to you.

If you sell or use biodiesel (not in a mixture) as a Help For help with transmission problems, call fuel, you may be eligible for a general business 703-487-4608. Long-distance charges may ap- credit on your income tax return. The biodiesel You can get help with unresolved tax issues, ply. fuel credit consists of a straight biodiesel fuel order free publications and forms, ask tax ques- credit and a biodiesel mixture credit. The bi- Phone. Many services are available by tions, and get more information from the IRS in odiesel mixture credit was discussed in Chapter phone. several ways. By selecting the method that is 5 earlier. See Chapter 5 for the definitions of best for you, you will have quick and easy ac- biodiesel and agri-biodiesel. cess to tax help. • Ordering forms, instructions, and publications. Call 1-800-829-3676 to order Certification. You must obtain and keep as Contacting your Taxpayer Advocate. If you current-year forms, instructions, and publi- part of your records a certification to you from have attempted to deal with an IRS problem cations and prior-year forms and instruc- the producer or importer of the biodiesel. The unsuccessfully, you should contact your Tax- tions. You should receive your order within certificate is required for any biodiesel fuel credit payer Advocate. 10 days. claimed. The certificate must identify the product The Taxpayer Advocate independently repproduced and the percentage of biodiesel and resents your interests and concerns within the • Asking tax questions. Call the IRS with

agri-biodiesel in the product. If the producer or IRS by protecting your rights and resolving your business tax questions at

importer of the biodiesel is also the taxpayer problems that have not been fixed through nor- 1-800-829-4933.

claiming the biodiesel credit, the certificate is mal channels. While Taxpayer Advocates can- • Solving problems. See Services under required. See Model Certificate F on page 20. not change the tax law or make a technical tax walk-in. decision, they can clear up problems that reStraight biodiesel credit. You can claim the sulted from previous contacts and ensure that • TTY/TDD equipment. If you have access

credit for any biodiesel not mixed with diesel your case is given a complete and impartial to TTY/TDD equipment, call

fuel. review. 1-800-829-4059 to ask tax or account

Chapter 8 How To Get Tax Help Page 13
questions or to order forms and publica- ness day to ask tax questions or get help Buy the CD-ROM from National Technical Intions. with a tax problem. An employee can ex- formation Service (NTIS) on the Internet at

plain IRS letters, request adjustments to www.irs.gov/cdorders for $22 (no handling fee) • TeleTax topics. Call 1-800-829-4477 to lis- your account, or help you set up a pay- or call 1-877-233-6767 toll free to buy the ten to pre-recorded messages covering ment plan. You can set up an appointment CD-ROM for $22 (plus a $5 handling fee). The various tax topics. by calling your local Center and, at the first release is available in early January and the

prompt, leaving a message requesting final release is available in late February.

Evaluating the quality of our telephone serv- Everyday Tax Solutions help. A represenices. To ensure that IRS representatives give tative will call you back within 2 business CD-ROM for small businesses. IRS

Publication 3207, Small Business Re- accurate, courteous, and professional answers, days to schedule an in-person appointwe use several methods to evaluate the quality ment at your convenience. To find the source Guide, is a must for every small

business owner or any taxpayer about to start a of our telephone services. One method is for a number, go to www.irs.gov or look in the

business. This handy, interactive CD contains second IRS representative to sometimes listen phone book under “United States Govern- all the business tax forms, instructions, and pub- in on or record telephone calls. Another is to ask ment, Internal Revenue Service.”

lications needed to successfully manage a busi- some callers to complete a short survey at the ness. In addition, the CD provides an end of the call. Mail. You can send your order for abundance of other helpful information, such as forms, instructions, and publications to how to prepare a business plan, finding financ- Walk-in. Many products and services the Distribution Center and receive a ing for your business, and much more. The de- are available on a walk-in basis. response within 10 workdays after your request sign of the CD makes finding information easy is received. and quick and incorporates file formats and

• Products. You can walk in or telephone browsers that can be run on virtually any National Distribution Center many post offices, libraries, and IRS of- desktop or laptop computer. P.O. Box 8903 fices to pick up certain forms, instructions, It is available in April. You can get a free Bloomington, IL 61702-8903 and publications. Some IRS offices, librar- copy by calling 1-800-829-3676 or by visiting the

ies, grocery stores, copy centers, city and CD-ROM for tax products. You can website at www.irs.gov/smallbiz.

county governments, credit unions, and of- order IRS Publication 1796, Federal Photographs of missing children. The Inter- fice supply stores have an extensive col- Tax Products on CD-ROM, and obtain: nal Revenue Service is a proud partner with the lection of products available to print from a

CD-ROM or photocopy from reproducible • Current tax forms, instructions, and publi- National Center for Missing and Exploited Chilcations. dren. Photographs of missing children selected proofs. Also, some IRS offices and librar- by the Center may appear in this publication on ies have the Internal Revenue Code, regu- • Prior-year tax forms and instructions. pages that would otherwise be blank. You can lations, Internal Revenue Bulletins, and

Cumulative Bulletins available for research • Frequently requested tax forms that may help bring these children home by looking at the

be filled in electronically, printed out for photographs and calling 1-800-THE-LOST purposes. submission, and saved for recordkeeping. (1-800-843-5678) if you recognize a child. • Services. You can walk in to your local • Internal Revenue Bulletins. Taxpayer Assistance Center every busiPage 14 Chapter 8 How To Get Tax Help
Appendix

This appendix contains models of the certificates and waivers discussed in this publication

 Model Certificate A

CERTIFICATE OF BUYER FOR PRODUCTION OF A

COLD WEATHER BLEND

To support vendor’s claim for credit or payment under section 6427 of the Internal Revenue Code

 (Buyer) certifies the following under penalties of perjury:

Name of Buyer

A. The kerosene (other than aviation-grade kerosene) to which this certificate applies will be used by Buyer to

produce a blend of kerosene and diesel fuel in an area described in a declaration of extreme cold and the

blend will be sold for use or used for heating purposes.

B. This certificate applies to percent of Buyer’s purchases from 

(name, address, and employer identification number of seller) on invoice or delivery

ticket number .

■ If Buyer violates the terms of this certificate, the Internal Revenue Service may withdraw Buyer’s right to

provide a certificate.

■ Buyer has not been notified by the Internal Revenue Service that its right to provide a certificate has been

withdrawn.

■ Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making such

fraudulent use of this certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Printed or typed name of person signing

Title of person signing

Employer identification number

Address of Buyer

Signature and date signed

Chapter 8 How To Get Tax Help Page 15
 Model Certificate B

CERTIFICATE OF FARMING USE OR STATE USE

To support vendor’s claim for credit or payment under section 6427 of the Internal Revenue Code

Name, Address, and Employer Identification Number of Vendor

The undersigned buyer (“Buyer”) hereby certifies the following under penalties of perjury:

A. Buyer will use the diesel fuel or kerosene to which this certificate relates — (check one):

1.  On a farm for farming purposes (as defined in §48.6420-4 of the Manufacturers and Retailers Excise Tax

Regulations) and Buyer is the owner, tenant, or operator of the farm on which the fuel will be used;

2.  On a farm (as defined in §48.6420-4(c)) for any of the purposes described in paragraph (d) of that section

(relating to cultivating, raising, or harvesting) and Buyer is not the owner, tenant, or operator of the farm on

which the fuel will be used; or

3.  For the exclusive use of a State or local government, or the District of Columbia.

B. This certificate applies to the following (complete as applicable):

1. If this is a single purchase certificate, check here  and enter:

a. Invoice or delivery ticket number 

b. Number of gallons 

2. If this is a certificate covering all purchases under a specified account or order number, check here 

and enter:

a. Effective date 

b. Expiration date 

(period not to exceed 1 year after effective date)

c. Buyer account or order number 

■ Buyer will provide a new certificate to the vendor if any information in this certificate changes.

■ If Buyer uses the diesel fuel or kerosene to which this certificate relates for a purpose other than stated in the

certificate, Buyer will be liable for any tax.

■ Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making such

fraudulent use of this certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Printed or typed name of person signing

Title of person signing

Name of Buyer

Employer identification number

Address of Buyer

Signature and date signed

Page 16 Chapter 8 How To Get Tax Help
 Model Waiver C

WAIVER FOR USE BY ULTIMATE PURCHASERS OF

AVIATION-GRADE KEROSENE USED IN NONTAXABLE USES

To support vendor’s claim for a credit or payment under § 6427 of the Internal Revenue Code.

Name, address, and employer identification number of ultimate vendor

The undersigned ultimate purchaser (“Buyer”) hereby certifies the following under the penalties of perjury:

The aviation-grade kerosene to which this waiver relates is purchased (check one):

for export;

for use in foreign trade (reciprocal benefits required for foreign registered airlines);

for use in certain helicopter and fixed-wing air ambulance uses;

for use other than as a fuel in the propulsion engine of an aircraft;

for the exclusive use of a nonprofit educational organization;

for use in an aircraft owned by an aircraft museum;

for use in military aircraft;

other nontaxable use (describe); or

for use in commercial aviation (other than foreign trade).

This waiver applies to the following (complete as applicable):

This is a single purchase waiver:

1. Invoice or delivery ticket number

2. Number of gallons

This is a waiver covering all purchases under a specified account or order number:

1. Effective date 

2. Expiration date (period not to exceed 1 year after the effective date)

3. Buyer account number 

Buyer will provide a new waiver to the vendor if any information in this waiver changes.

If Buyer uses the aviation-grade kerosene to which this waiver relates for a use other than the use stated

above, Buyer will be liable for tax.

Buyer understands that by signing this waiver, Buyer gives up its right to claim any credit or payment for the

aviation-grade kerosene used in a nontaxable use.

Buyer acknowledges that it has not and will not claim any credit or payment for the aviation-grade kerosene

to which this waiver relates.

Buyer understands that the fraudulent use of this waiver may subject Buyer and all parties making such

fraudulent use of this waiver to a fine or imprisonment, or both, together with the costs of prosecution.

Printed or typed name of person signing

Title of person signing

Name of Buyer

Employer identification number

Address of Buyer

Signature and date signed

Chapter 8 How To Get Tax Help Page 17
 Model Certificate D

CERTIFICATE FOR STATE USE OR NONPROFIT EDUCATIONAL

ORGANIZATION USE

To support vendor’s claim for a credit or payment under § 6416(a)(4) of the Internal Revenue Code.

Name, address, and employer identification number of ultimate vendor

The undersigned ultimate purchaser (“Buyer”) hereby certifies the following under the penalties of perjury:

Buyer will use the gasoline or aviation gasoline to which this certificate relates (check one):

For the exclusive use of a state; or

For the exclusive use of a nonprofit educational organization.

This certificate applies to the following (complete as applicable):

This is a single purchase certificate:

1. Invoice or delivery ticket number

2. Number of gallons

This is a certificate covering all purchases under a specified account or order number:

1. Effective date 

2. Expiration date (period not to exceed 1 year after the effective date)

3. Buyer account number

Buyer will provide a new certificate to the vendor if any information in this certificate changes.

Buyer understands that by signing this certificate, Buyer gives up its right to claim any credit or payment for

the gasoline or aviation gasoline to which this certificate relates.

Buyer acknowledges that it has not and will not claim any credit or payment for the gasoline or aviation

gasoline to which this certificate relates.

Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making such

fraudulent use of this certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Printed or typed name of person signing

Title of person signing

Name of Buyer

Employer identification number

Address of Buyer

Signature and date signed

Page 18 Chapter 8 How To Get Tax Help
 Model Waiver E

WAIVER FOR USE BY ULTIMATE PURCHASERS OF DIESEL FUEL OR

KEROSENE USED IN INTERCITY BUS TRANSPORTATION

To support vendor’s claim for a credit or payment under § 6427 of the Internal Revenue Code.

Name, address, and employer identification number of ultimate vendor

The undersigned ultimate purchaser (“Buyer”) hereby certifies the following under the penalties of perjury:

The diesel fuel or kerosene to which this waiver relates is purchased for use in intercity bus transportation.

This waiver applies to the following (complete as applicable):

This is a single purchase waiver:

1. Invoice or delivery ticket number

2. Number of gallons

This is a waiver covering all purchases under a specified account or order number:

1. Effective date 

2. Expiration date (period not to exceed 1 year after the effective date)

3. Buyer account number 

Buyer will provide a new waiver to the vendor if any information in this waiver changes.

If Buyer uses the diesel fuel or kerosene to which this waiver relates for a use other than in intercity bus

transportation, Buyer will be liable for tax.

Buyer understands that by signing this waiver, Buyer gives up its right to claim any credit or payment for the

diesel fuel or kerosene used in intercity bus transportation.

Buyer acknowledges that it has not and will not claim any credit or payment for the diesel fuel or kerosene to

which this waiver relates.

Buyer understands that the fraudulent use of this waiver may subject Buyer and all parties making such

fraudulent use of this waiver to a fine or imprisonment, or both, together with the costs of prosecution.

Printed or typed name of person signing

Title of person signing

Name of Buyer

Employer identification number

Address of Buyer

Signature and date signed

Chapter 8 How To Get Tax Help Page 19
 Model Certificate F

CERTIFICATE FOR BIODIESEL

(To support a claim under §§ 6426(c), 6427(e), and 40A of the Internal Revenue Code)

Name, address, and employer identification number of claimant.

The undersigned biodiesel producer (“Producer”) hereby certifies the following under penalties of perjury:

Producer certifies that the biodiesel to which this certificate relates is monoalkyl esters of long chain fatty

acids derived from plant or animal matter that meets the requirements of the American Society of Testing and Materials

D6751 and the registration requirements for fuels and fuel additives established by EPA under § 211 of the

Clean Air Act (42 U.S.C § 7545).

Producer certifies that the biodiesel to which this certificate relates is:

% Agri-biodiesel (derived solely from virgin oils, including esters derived from virgin vegetable oils from corn,

soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, and mustard seeds and

from animal fats).

% Biodiesel (other than agri-biodiesel)

This certificate applies to the following:

1. Invoice or delivery ticket number

2. Number of gallons

Producer understands that fraudulent use of this certificate may subject producer, claimant, and parties making such

fraudulent use of this certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Printed or typed name of person signing

Title of person signing

Name of Producer

Employer identification number

Address of Producer

Signature and date signed

Page 20 Chapter 8 How To Get Tax Help
To help us develop a more useful index, please let us know if you have ideas for index entries. Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A L Export ........................ 6 state or nonprofit educational

Air ambulance ................ 7 Liquefied petroleum gas organization use ........... 3

Aircraft museum ............. 7 (LPG) ...................... 4 Suggestions ................. 2 F

Alcohol fuel credit . . . . . . . . . . . 12 Farming ...................... 5

Alcohol fuel mixture Farming and state use . . . . . . 4, 8 M T

credit . . . . . . . . . . . . . . . . . . . . . 11 Fishing ....................... 6 Military aircraft ............... 8 Tax help . . . . . . . . . . . . . . . . . . . . . 13

Annual claims ................ 9 Foreign trade ................. 7 Taxpayer Advocate . . . . . . . . . . 13

Assistance (See Tax help) Form: N Taxpayer identification

Aviation: 4136 . . . . . . . . . . . . . . . . . . . . . . 10 number .................... 9 Nonprofit educational Gasoline .................... 2 6478 . . . . . . . . . . . . . . . . . . . . . . 13 Train ......................... 8 organization ............... 7 Grade Kerosene ............ 4 720 . . . . . . . . . . . . . . . . . . . . . . . . . 9 Nonprofit educational Transmix ..................... 3

8849 ....................... 9 organization use and state TTY/TDD information . . . . . . . . 13

B 8864 . . . . . . . . . . . . . . . . . . . . . . 13 use ......................... 8

Biodiesel fuel credit Free tax services . . . . . . . . . . . . 13 . . . . . . . . . 13 U

Biodiesel mixture credit . . . . . 12 O Ultimate purchaser . . . . . . . . . 8, 9

Blocked pump ................ 4 G Off-highway use .............. 5 Used other than as a fuel:

Boats ........................ 6 Gasoline ..................... 2 Aviation-grade kerosene ..... 7

Buses . . . . . . . . . . . . . . . . . . . . . . 6, 7 Diesel fuel and kerosene ..... 7 P H Uses, nontaxable: Penalties . . . . . . . . . . . . . . . . . . . . 10 C Helicopter .................... 7 Aviation gasoline ............ 3

Aviation-grade kerosene ..... 4 Claims: Help (See Tax help) Q Diesel fuel .................. 3 Claiming a credit . . . . . . . . . . . 10 Highway vehicle . . . . . . . . . . . . 5, 7 Qualified local bus ........... 6 Gasoline .................... 3 Claiming a refund ........... 9 Kerosene ................... 3 Filing claims ................ 8 I Liquefied petroleum gas Comments ................... 2 R Identifying number ........... 9 (LPG) .................... 4 Commercial aviation ......... 8 Records ...................... 8 Income, include in . . . . . . . . . . . 10 Commercial fishing .......... 6 Refunds ...................... 9 Intercity and local buses ..... 6 V Credits . . . . . . . . . . . . . . . . . . . . . . 10 Registered ultimate Interest . . . . . . . . . . . . . . . . . . . . . . 10 Vendors, registered vendor . . . . . . . . . . . . . . 3, 4, 8, 9 ultimate . . . . . . . . . . . . . . . 3, 8, 9 D

Diesel fuel .................... 3 K S ■

Kerosene ..................... 3 School bus ................... 7

E Special fuels ................. 8

State or local Excluded liquid .............. 3

governments ............... 7

Page 21
Tax Publications for Business Taxpayers

General Guides

Commonly Used Tax Forms

Spanish Language Publications

Your Rights as a Taxpayer

Your Federal Income Tax (For

Individuals)

Farmer’s Tax Guide

Tax Guide for Small Business (For

Individuals Who Use Schedule C or

C-EZ)

Tax Calendars for 2005

Highlights of 2004 Tax Changes

Guide to Free Tax Services

(Circular E), Employer’s Tax Guide

Employer’s Supplemental Tax Guide

(Circular A), Agricultural Employer’s

Tax Guide

(Circular SS), Federal Tax Guide For

Employers in the U.S. Virgin Islands,

Guam, American Samoa, and the

Commonwealth of the Northern

Mariana Islands

Household Employer’s Tax Guide

Circular PR Guía Contributiva Federal

Para Patronos Puertorriqueños

Travel, Entertainment, Gift, and Car

Expenses

Tax Withholding and Estimated Tax

Excise Taxes for 2005

Withholding of Tax on Nonresident

Aliens and Foreign Entities

Social Security and Other Information

for Members of the Clergy and

Religious Workers

Residential Rental Property

Self-Employment Tax

Depreciating Property Placed in

Service Before 1987

Business Expenses

Net Operating Losses (NOLs) for

Individuals, Estates, and Trusts

Installment Sales

Accounting Periods and Methods

Corporations

Sales and Other Dispositions of Assets

Basis of Assets

Examination of Returns, Appeal Rights,

and Claims for Refund

Retirement Plans for Small Business

(SEP, SIMPLE, and Qualified Plans)

Determining the Value of Donated

Property

Starting a Business and Keeping

Records

The IRS Collection Process

Information on the United StatesCanada Income Tax Treaty

Bankruptcy Tax Guide

Direct Sellers

Passive Activity and At-Risk Rules

How To Depreciate Property

Reporting Cash Payments of Over

$10,000

The Taxpayer Advocate Service of the

IRS—How To Get Help With

Unresolved Tax Problems

Derechos del Contribuyente

Cómo Preparar la Declaración de

Impuesto Federal

English-Spanish Glossary of Words

and Phrases Used in Publications

Issued by the Internal Revenue

Service

Tax on Unrelated Business Income of

Exempt Organizations

Wage and Tax Statement

Itemized Deductions & Interest and

Ordinary Dividends*

Profit or Loss From Business*

Net Profit From Business*

Capital Gains and Losses*

Supplemental Income and Loss*

Profit or Loss From Farming*

Credit for the Elderly or the Disabled*

Estimated Tax for Individuals*

Self-Employment Tax*

Amended U.S. Individual Income Tax Return*

Capital Gains and Losses*

Partner’s Share of Income,

Deductions, Credits, etc.*

U.S. Corporation Income Tax Return*

U.S. Income Tax Return for an S Corporation

Employee Business Expenses*

Unreimbursed Employee Business

Expenses*

Power of Attorney and Declaration of

Representative*

Child and Dependent Care Expenses*

General Business Credit*

Application for Automatic Extension of Time To File

U.S. Individual Income Tax Return*

Moving Expenses*

Additional Taxes on Qualified Plans (Including

IRAs) and Other Tax-Favored Accounts*

Installment Sale Income*

Noncash Charitable Contributions*

Change of Address*

Expenses for Business Use of Your Home*

Tax Highlights for Commercial

Fishermen

910

595

553

509

334

225

17

1

Nondeductible IRAs*

Passive Activity Loss Limitations*

15

15-A

51

80

179

926

378

463

505

510

515

517

527

533

534

535

536

537

541

538

542

Partnerships

544

551

556

560

561

583

594

597

598

901

911

925

946

947

908

1544

1546

1SP

850

579SP

594SP Comprendiendo el Proceso de Cobro

10134

Sch A & B

Sch C

Sch C-EZ

Sch D

Sch E

Sch F

Sch H Household Employment Taxes*

Sch R

Sch SE

1040-ES

1040X

Sch D

Sch K-1

1120

1120S

1065 U.S. Return of Partnership Income*

2106

2106-EZ

2441

2848

3800

4868

3903

5329

6252

8283

8582

8606

8822

8829

Specialized Publications

Fuel Tax Credits and Refunds

W-4 Employee’s Withholding Allowance Certificate*

Employer’s Annual Federal Unemployment

(FUTA) Tax Return*

940

940-EZ

1040 U.S. Individual Income Tax Return*

Employer’s Annual Federal Unemployment

(FUTA) Tax Return*

Business Use of Your Home (Including

Use by Daycare Providers)

587

U.S. Tax Treaties

Practice Before the IRS and Power of

Attorney

Tax Incentives for Distressed Employer’s Guides Communities

Certification for Reduced Tax Rates in

Tax Treaty Countries

686

954

Capital Gains and Losses and Built-In Gains

Shareholder’s Share of Income,

Deductions, Credits, etc.

Sch D

Sch K-1

Underpayment of Estimated Tax by Individuals,

Estates, and Trusts*

2210

Report of Cash Payments Over $10,000 Received

in a Trade or Business*

8300

4562 Depreciation and Amortization*

4797 Sales of Business Property*

Informe de Pagos en Efectivo en

Exceso de $10,000 (Recibidos en

una Ocupación o Negocio)

1544SP

U.S. Corporation Short-Form Income

Tax Return*

1120-A

See How To Get Tax Help for a variety of ways to get publications, including by

computer, phone, and mail.

See How To Get Tax Help for a variety of ways to get forms, including by computer, fax, phone,

and mail. Items with an asterisk are available by fax. For these orders only, use the catalog number

when ordering.

Form Number and Title

Catalog

Number

W-2

10220

11234

10983

17001

11320

11330

11334

14374

11338

11344

11346

12187

11358

11340

11360

941 Employer’s Quarterly Federal Tax Return*

11359

Sch J Income Averaging for Farmers and Fishermen* 25513

11510

Catalog

Number

20604

11744

11862

11980

12392

12490

12906

13086

13141

13329

13601

62299

63966

12081

13232

63704

62133

11390

11393

11394

11450

11456

11700

11520

11516

Form Number and Title

Sch D-1 Continuation Sheet for Schedule D* 10424

Employer’s Tax Guide to Fringe

Benefits

15-B

Page 22