United States Government Accountability Office

Washington, DC 20548 

November 5, 2009 

The Honorable Calvin L. Scovel III 

Inspector General 

Department of Transportation 

Subject: Applying Agreed-Upon Procedures: Fiscal Year 2009 Airport and Airway 

Trust Fund Excise Taxes 

Dear Mr. Scovel: 

We have performed the procedures described in the enclosure to this letter, which we 

agreed to perform and with which you concurred, solely to assist your office in 

ascertaining whether the net excise tax revenue distributed to the Airport and Airway 

Trust Fund (AATF) for the fiscal year ended September 30, 2009, is supported by the 

underlying records. As agreed with your office, we evaluated fiscal year 2009 activity 

affecting excise tax distributions to the AATF. 

We conducted the engagement in accordance with U.S. generally accepted 

government auditing standards, which incorporate certain financial audit and 

attestation standards established by the American Institute of Certified Public 

Accountants. 

You are responsible for the adequacy of these agreed-upon procedures to meet your 

objectives, and we make no representation in that respect. The procedures we agreed 

to perform were related to (1) transactions that represent the underlying basis of 

amounts distributed from the general fund to the AATF during fiscal year 2009, (2) 

the Internal Revenue Service’s (IRS) quarterly AATF receipt certifications during 

fiscal year 2009, (3) the Department of the Treasury’s Financial Management Service 

adjustments to AATF excise tax distributions during fiscal year 2009, (4) the 

Department of the Treasury’s Office of Tax Analysis’s (OTA) process for estimating 

excise tax amounts to be distributed to the AATF for the fourth quarter of fiscal year 

2009, (5) adjustments to the AATF for tax on kerosene used in aviation during fiscal 

year 2009, and (6) the amount of net excise taxes distributed to the AATF during 

fiscal year 2009. The enclosure provides more detail on the agreed-upon procedures 

and our results. 

We were not engaged to perform, and did not perform, an examination, the objective 

of which would have been to express an opinion on the amount of net excise taxes 

distributed to the AATF during fiscal year 2009. Accordingly, we do not express such 

an opinion. Had we performed additional procedures, other matters might have come 

to our attention that we would have reported to you. We completed the agreed-upon 

procedures on October 28, 2009. 

GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures
Page 2 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures

We provided a draft of this letter, along with the enclosure, to IRS and OTA officials 

for review and comment. IRS agreed with the results and findings presented in the 

enclosure. OTA agreed with the results and findings presented in the enclosure 

relating to its responsibilities, that is, the procedures performed in the estimation 

process for the quarter ended September 30, 2009. 

This report is intended solely for the use of the Office of Inspector General of the 

Department of Transportation and should not be used by those who have not agreed 

to the procedures or have not taken responsibility for the sufficiency of the 

procedures for their purposes. However, the report is a matter of public record, and 

its distribution is not limited. The report is available at no charge on the GAO Web 

site at http://www.gao.gov. 

If you have any questions concerning this report, please contact me at (202) 512-3406 

or sebastians@gao.gov. Contact points for our Offices of Congressional Relations and 

Public Affairs may be found on the last page of this report. 

Sincerely yours, 

Steven J. Sebastian 

Director 

Financial Management and Assurance 

Enclosure 
Enclosure 

Airport and Airway Trust Fund Excise Tax Procedures and Results 

I. Procedures on Transactions That Represent the Underlying Basis of 

Amounts Distributed to the Airport and Airway Trust Fund (AATF) in 

Fiscal Year 2009 

A. Nonstatistical selection of tax returns from the quarters ending June 30, 2008,1

and September 30, 20082 

1. For each of the quarters ending June 30, 2008, and September 30, 2008, 

select the 30 largest excise tax returns containing excise taxes related 

primarily to the AATF and the Highway Trust Fund (HTF) on the basis of 

total tax liability amount3

 from the Internal Revenue Service’s (IRS) master 

file.4 

Description of Findings and Results

We selected the 30 largest excise tax returns related primarily to the AATF 

and the HTF from each of the two quarters for testing. The selection was 

based on the total tax liability amount and type of taxes owed for each 

return from IRS’s master file. 

The total tax liability amount related to the 30 returns from the quarter 

ended June 30, 2008, was approximately $9.5 billion or 69 percent of the 

total recorded tax liability amount of $13.7 billion for all excise tax returns 

for the quarter. Of these 30 returns, 10 contained primarily AATF-related 

tax liabilities and 20 contained primarily HTF-related tax liabilities. 

 

1

In October 2008, the Internal Revenue Service (IRS) completed its certification of excise tax distributions 

to the AATF for the quarter ended June 30, 2008, and the Department of the Treasury’s Financial 

Management Service (FMS) recorded the corresponding adjustment to transfer funds between the general 

fund and the trust fund. Administrators of the Federal Aviation Administration (FAA) recorded the 

adjustment amount on FAA’s financial statements, which include AATF data, for fiscal year 2008. 

2

The IRS certification of excise tax distributions and corresponding FMS adjustment for the quarter ended 

September 30, 2008, were completed in February 2009 and thus affected distributions to the AATF during 

fiscal year 2009. 

3

Although the certifications are based on amounts collected, we used the tax liability amounts to identify 

the taxpayers paying the largest amounts of excise taxes. These taxpayers generally pay their excise taxes 

in full each quarter. 

4

The master file is a detailed database containing taxpayer information. 

 Page 3 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

The total tax liability amount related to the 30 returns from the quarter 

ended September 30, 2008, was approximately $9.2 billion or 69 percent of 

the total recorded tax liability amount of $13.4 billion for all excise tax 

returns for the quarter. Of these 30 returns, 10 contained primarily AATFrelated tax liabilities and 20 contained primarily HTF-related tax liabilities. 

2. For each of the 20 returns related primarily to the AATF from the quarters 

ended June 30, 2008, and September 30, 2008, perform the following 

procedures:5 

(a) Compare the assessment amounts for abstracts6 26, 27, and 28 from the 

tax return to IRS’s master file for agreement. 

Description of Findings and Results

The assessment amount for abstracts 26, 27, and 28 on the tax return 

agreed with the master file for all 20 returns. 

(b) Calculate the assessment amounts on the tax return for the selected 

abstracts to determine whether they are mathematically correct. 

Description of Findings and Results

The taxpayers’ calculations for the selected abstracts were 

mathematically correct on all 20 returns. 

 

5

These procedures encompassed approximately $4.5 billion in prorated collections affecting distributions 

to the AATF. IRS certifies to trust funds the amount of excise taxes collected. Because taxpayers have 

sometimes not fully paid their tax liability, IRS must allocate the amount of payments actually received 

among the different excise taxes reported on the taxpayers’ returns. IRS’s Collection Certification System 

prorates a taxpayer’s payments proportionately among all taxes reported as owed on the tax return. For 

example, if a corporation reports that it owes $4 million for gasoline tax, $2 million for diesel fuel tax, and 

$1 million for kerosene tax on its Form 720, Quarterly Federal Excise Tax Return, but has paid IRS only 

$3.5 million at the time IRS performs its certification, the Collection Certification System prorates the $3.5 

million in the following manner: $2 million to gasoline tax, $1 million to diesel fuel tax, and $500,000 to 

kerosene tax. 

6

The abstract numbers identify the tax type (e.g., gasoline and ticket tax) and are used as the basis for 

determining the distribution of the excise taxes to the various trust funds. Abstract numbers are preprinted 

on the Form 720 and are used by the taxpayer to report excise tax assessments. If the return was related to 

the AATF, we selected (1) tax on transportation of persons by air (abstract 26), (2) tax on the use of 

international air travel facilities (abstract 27), and (3) tax on transportation of property by air (abstract 28). 

If the return was related to the HTF, we selected (1) diesel fuel tax (abstract 60) and (2) gasoline tax 

(abstract 62). The tax amounts related to the selected abstracts for each trust fund are the largest tax 

amounts reported on the taxpayer’s excise tax return and made up over 94 percent of the total amount 

certified to the AATF and over 84 percent of the total amount certified to the HTF for the quarters ended 

June 30, 2008, and September 30, 2008. 

 Page 4 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

(c) Calculate the prorated collection amount for the selected abstracts 

based on information from the master file and compare this amount to 

the amount in the Collection Certification System audit files7

 for 

agreement. 

Description of Findings and Results

The independently calculated prorated collection amounts for the 

selected abstracts agreed with amounts in IRS’s Collection 

Certification System audit files for 19 of the 20 returns. 

For the other return, IRS recorded less credits than indicated by the 

taxpayer on its Form 720 tax return for the quarter ended June 30, 

2008. As a result of this error, the prorated collection amounts for 

abstracts 26, 27, and 28 were misstated. This, in turn, caused the AATF 

to receive $36,269 more in excise tax distributions than it should have 

for the quarter ended June 30, 2008. 

IRS identified and corrected this error in November 2008, after the cutoff date for its excise tax certification to the AATF for the quarter 

ended June 30, 2008. As a result, the correction of the error was 

reflected in IRS’s excise tax certification to the AATF for the 

subsequent quarter ended September 30, 2008. Because IRS’s excise 

tax certification to the AATF for the quarter ended June 30, 2008, 

affected fiscal year 2008 distributions to the AATF but its certification 

for the quarter ended September 30, 2008, affected fiscal year 2009 

distributions to the AATF, the error caused the AATF to receive 

$36,269 in fiscal year 2008 that it should have received for fiscal year 

2009.8

B. Statistical selection of attribute and monetary unit samples (MUS) from the 

quarters ended December 31, 2008, and March 31, 2009 

1. Sampling and other procedures 

 

7

The Collection Certification System produces what IRS refers to as audit files. These audit files contain 

the individual prorated collections by abstract and taxpayer identification number. The certified amounts 

to the trust funds are calculated by subtracting credits from prorated collections and then multiplying the 

difference by the applicable trust fund distribution rates. 

8

Each fiscal year, excise tax distributions to the AATF are affected by quarterly excise tax certifications 

prepared by IRS. However, due to the timing of the certifications, the certifications affecting distributions 

do not correspond exactly to the quarters of the fiscal year. For example, IRS’s certifications for the 

quarters ended September 30, 2007; December 31, 2007; March 31, 2008; and June 30, 2008, affected fiscal 

year 2008 excise tax distributions to AATF, while IRS’s certification for the quarters ended September 30, 

2008; December 31, 2008; March 31, 2009; and June 30, 2009, affected fiscal year 2009 excise tax 

distributions to the AATF. 

 Page 5 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

(a) Compare excise tax collections from the master file with excise tax 

collections from the Collection Certification System audit files for the 

first two quarters of fiscal year 2009 to determine if they materially 

agree.9 

Description of Findings and Results

Excise tax collections from the master file materially agreed with the 

Collection Certification System for the first two quarters of fiscal year 

2009. 

(b) Compare excise tax collections from the master file with excise tax 

collections from IRS’s general ledger for the first 9 months of fiscal 

year 2009 to determine if they materially agree.10

 

Description of Findings and Results

The amount of excise tax collections from the master file was 1.63 

percent less than the amount of excise tax collections recorded in the 

general ledger for the first 9 months of fiscal year 2009, which 

exceeded the 1 percent materiality defined for this procedure. 

(c) Select a random attribute sample of 78 excise tax returns from the 

master file.11 Compare assessment and receipt information for each 

return from the master file to the Collection Certification System. 

Description of Findings and Results

For all 78 returns, assessment and receipt information from the master 

file agreed with the information in the Collection Certification System. 

 

 

9

For the purpose of this procedure, “material” is defined as 1 percent of the excise tax collections for the 

quarters ended December 31, 2008, and March 31, 2009. 

10This is a reconciliation of all excise tax collections that posted to the master file and general ledger during 

the first 9 months of fiscal year 2009 and is not limited to the first two quarters. For the purpose of this 

procedure, “material” is defined as 1 percent of the excise tax collections for the first 9 months of fiscal 

year 2009. 

11For this sample, if one or no errors were found in testing the 78 items, we would be 90 percent confident 

that the error rate in the population would not exceed 5 percent. 

 Page 6 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

(d) Sum the prorated collections for selected abstracts12 from the audit 

files and compare these amounts to amounts in the Report of Excise 

Tax Collection13 to determine if the Collection Certification System 

properly summarized the prorated collections. 

Description of Findings and Results

The Collection Certification System properly summarized the prorated 

collections for all of the selected abstracts. Prorated collections from 

the audit files for the selected abstracts agreed with the corresponding 

amounts in the Report of Excise Tax Collection. 

(e) Separate the total population of prorated collections from the audit 

files into the following distinct populations: (1) AATF, (2) HTF, and (3) 

other excise tax abstracts. Use MUS to select a sample of prorated 

excise tax collections from the AATF population using a confidence 

level of 80 percent, a tolerable misstatement of $118 million, and an 

expected aggregate error amount of $35 million.14

 

Description of Findings and Results

Use of MUS with a confidence level of 80 percent, a tolerable 

misstatement of $118 million, and an expected aggregate error amount 

of $35 million resulted in a sample of 6115 prorated collections for the 

AATF for the first two quarters of fiscal year 2009. 

 

12The selected abstracts are (1) tax on transportation of persons by air (abstract 26), (2) tax on the use of 

international air travel facilities (abstract 27), (3) tax on transportation of property by air (abstract 28), (4) 

tax on kerosene for use in commercial aviation (abstract 77), ( 5) diesel fuel tax (abstract 60), and (6) 

gasoline tax (abstract 62). The tax amounts for the four AATF-related abstracts made up over 98 percent of 

the total amount certified to the AATF, and the tax amounts for the two HTF-related abstracts made up 

over 91 percent of the total amount certified to the HTF for the quarters ended December 31, 2008, and 

March 31, 2009. 

13The Report of Excise Tax Collection contains prorated collections, classified by abstracts, which serve as 

the basis for IRS’s quarterly trust fund certifications. 

14 The $118 million tolerable misstatement represents approximately 1 percent of the net excise tax 

revenue distributed to the AATF in fiscal year 2008. The expected aggregate error amount of $35 million 

represents approximately 30 percent of the tolerable misstatement amount. 

15The planned sample size using MUS was 116 items. MUS selects dollars versus specific transaction items 

by dividing the population of prorated excise tax collections by dollar intervals. The dollar interval for 

AATF was $43 million. Accordingly, any item with a dollar value equal to or exceeding the interval would 

be selected, whereas items less than the interval might not be selected. For example, an item of $86 million 

would cover two dollar intervals, but represent one sample item. Because large-dollar items cover more 

than one interval, the 61 unique sampled transactions selected represented 116 dollar intervals. 

 Page 7 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

(f) Select samples of prorated excise tax collections from the two nonAATF populations. Use MUS to select a sample of prorated excise tax 

collections from the HTF population using a confidence level of 80 

percent, a tolerable misstatement of $364 million, and an expected 

aggregate error amount of $109 million.16 Select a random attribute 

sample of 45 items from the population of prorated tax collections 

related to all excise taxes other than the AATF and the HTF.17

 

Description of Findings and Results 

Use of MUS with a confidence level of 80 percent, a tolerable 

misstatement of $364 million, and an expected aggregate error amount 

of $109 million resulted in a sample of 9018 prorated collections for the 

HTF for the first two quarters of fiscal year 2009. 

A random attribute sample of 45 items was selected from the 

population of prorated tax collections related to all excise taxes other 

than the AATF and the HTF. 

2. Procedures on transactions 

(a) For each prorated excise tax collection sampled from the AATF 

population: 

• Compare the assessment amount for the sampled item from the tax 

return to IRS’s master file for agreement. 

Description of Findings and Results

The assessment amount on the tax return agreed with the master 

file for each of the 61 sampled items. 

• Calculate the assessment amount on the tax return for the sampled 

item to determine whether the amount is mathematically correct. 

 

16 The $364 million tolerable misstatement represents approximately 1 percent of the net excise tax 

revenue distributed to the HTF in fiscal year 2008. The expected aggregate error amount of $109 million 

represents approximately 30 percent of the tolerable misstatement amount. 

17For this sample, if no errors were found in testing the 45 items, we would be 90 percent confident that the 

error rate in the population would not exceed 5 percent. 

18The planned sample size using MUS was 135 items. As explained in footnote 15, MUS selects dollars 

instead of specific transaction items by dividing the population of prorated excise tax collections by dollar 

intervals. The dollar interval for HTF was $133 million. Because large-dollar items cover more than one 

interval, the 90 unique sampled transactions selected represented 135 dollar intervals. 

 Page 8 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

Description of Findings and Results

The assessment amount on the tax return was mathematically 

correct for each of the 61 sampled items. 

• Calculate the prorated collection amount for the sampled item 

based on information from the master file and compare this amount 

to the amount in the Collection Certification System audit files for 

agreement. 

Description of Findings and Results

The independently calculated prorated collection amount agreed 

with the amount in the Collection Certification System audit files for 

each of the 61 sampled items. 

(b) Inspect the tax returns and master file information for the two samples 

of prorated collections from the non-AATF populations to determine if 

they contain any AATF excise tax collections. 

Description of Findings and Results

The two samples of prorated collections from the non-AATF 

populations did not contain any AATF excise tax collections. 

(c) Evaluate the results of conducting steps (a) and (b). 

Description of Findings and Results

For the first two quarters of fiscal year 2009, the net most likely error 

was $0 with an upper error limit of $70.9 million at the 80 percent 

confidence level. 

II. Procedures on IRS’s Quarterly AATF Receipt Certifications 

Perform the following procedures on IRS’s AATF receipt certifications for the 

quarters ended September 30, 2008; December 31, 2008; March 31, 2009; and 

June 30, 2009: 

A. Inspect the certification letters for authorizing signatures. 

Description of Findings and Results

The certification letters for all four quarters had authorizing signatures. 

 Page 9 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

B. Inspect the certification letters and supporting worksheets to determine if 

evidence exists that they were reviewed by the supervisor or another analyst. 

Description of Findings and Results

There was evidence that the supervisor or another analyst reviewed the 

certification letters and supporting worksheets for all four quarters. 

C. Calculate the totals on the certification letters to determine if they are 

mathematically correct. 

Description of Findings and Results

The totals on the certification letters for all four quarters were mathematically 

correct. 

D. Trace the certified amounts for tax on transportation of persons by air 

(abstract 26), tax on the use of international air travel facilities (abstract 27), 

tax on transportation of property by air (abstract 28), and tax on kerosene for 

use in commercial aviation (abstract 77)19 from the certification letters back to 

the Report of Excise Tax Collection20 and the Treasury 90 Report21 for 

agreement. 

Description of Findings and Results

The certified amounts for tax on transportation of persons by air (abstract 26), 

tax on the use of international air travel facilities (abstract 27), tax on 

transportation of property by air (abstract 28), and tax on kerosene for use in 

commercial aviation (abstract 77) from the certification letters agreed with the 

related Report of Excise Tax Collection and the Treasury 90 Report for all 

four quarters. 

 

19The certified amounts for tax on transportation of persons by air (abstract 26), tax on the use of 

international air travel facilities (abstract 27), tax on transportation of property by air (abstract 28), and 

tax on kerosene for use in commercial aviation (abstract 77) made up over 97 percent of the total amount 

certified to the AATF for the quarters ended September 30, 2008; December 31, 2008; March 31, 2009; and 

June 30, 2009. 

20IRS uses data from two of these reports, covering sequential processing intervals, for each quarterly 

certification. Collections are classified by abstract on the report when the related Form 720 tax return has 

been posted to IRS’s master file during the processing interval covered by the report. The two reports used 

may contain collections related to prior quarters that IRS certifies as part of the current quarter’s 

collections because the related return was not posted to the master file until the processing intervals 

covered by these reports. 

21The Treasury 90 Report summarizes excise tax credit information and is produced quarterly by IRS 

service center campus systems. IRS has seven service center campuses that receive and process tax 

returns and payments. 

 Page 10 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

E. Compare the distribution rates used by IRS for tax on transportation of 

persons by air (abstract 26), tax on the use of international air travel facilities 

(abstract 27), tax on transportation of property by air (abstract 28), and tax on 

kerosene for use in commercial aviation (abstract 77) for agreement with the 

applicable laws. 

Description of Findings and Results

The distribution rates used by IRS for tax on transportation of persons by air 

(abstract 26), tax on the use of international air travel facilities (abstract 27), 

tax on transportation of property by air (abstract 28), and tax on kerosene for 

use in commercial aviation (abstract 77) agreed with the applicable laws in 

effect during all four quarters. 

F. Inspect the Report of Excise Tax Collection used in the certification to 

determine if it contains significant22 collections from prior quarters. 

Description of Findings and Results

The Report of Excise Tax Collection used in the certification for the quarters 

ended September 30, 2008; March 31, 2009; and June 30, 2009, did not contain 

significant collections from prior quarters. 

For the quarter ended December 31, 2008, the Report of Excise Tax Collection

used in the certification contained approximately $77 million from prior 

quarters. Due to a taxpayer error, one large-dollar excise tax return containing 

primarily AATF-related excise taxes was omitted from IRS’s excise tax 

certifications to the AATF for the quarter ended September 30, 2008. Although 

IRS identified the taxpayer’s error and eventually posted the return to the 

taxpayer’s master file account module,23 this was not done in time for the 

return information to be included in IRS’s excise tax certification to the AATF 

for the quarter ended September 30, 2008. Since IRS’s excise tax certification 

to the AATF for the quarters ended September 30, 2008, and December 31, 

2008, are both used in determining fiscal year 2009 excise tax distributions to 

the AATF, this had no effect on the dollar amount of excise tax distributions to 

the AATF for fiscal year 2009. 

 

22For this procedure, “significant” is defined as $55 million. This represents approximately 2 percent of the 

total amount certified to the AATF for each of the quarters ended September 30, 2008; December 31, 2008; 

March 31, 2009; and June 30, 2009. 

23A taxpayer may have multiple accounts and account modules within IRS’s master files. Each unique 

account is identified by a taxpayer identification number (i.e., social security number or an employer 

identification number). Each account contains unique modules identified by the specific tax period (e.g., 

year, quarter) and tax type (e.g., excise tax, individual tax, payroll tax, etc.). 

 Page 11 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

III. Procedures on Financial Management Service Adjustments 

Perform the following procedures on Financial Management Service (FMS) 

adjustments to AATF excise tax distributions for the quarters ended 

September 30, 2008; December 31, 2008; March 31, 2009; and June 30, 2009: 

A. Calculate the FMS adjustment amounts based on the Office of Tax Analysis 

(OTA) transfer forms24 and IRS certification letters to determine if they are 

mathematically correct. 

Description of Findings and Results

The FMS adjustment amounts for all four quarters were mathematically 

correct. These amounts were25

 

• ($9,858,000) for the quarter ended September 30, 2008; 

• ($53,803,000) for the quarter ended December 31, 2008; 

• ($282,501,000) for the quarter ended March 31, 2009; and 

• ($951,478,000) for the quarter ended June 30, 2009. 

IV. Procedures on Excise Tax Distributions to the AATF for the Quarter 

Ended September 30, 2009 

A. Determine if OTA’s process for identifying and incorporating the effect of new 

legislation on excise tax receipts into its trust fund estimates26 was in place 

during the quarter ended September 30, 2009. 

Description of Findings and Results

OTA’s process for identifying and incorporating into its trust fund estimates 

the effect of new legislation on excise tax receipts was in place during the 

quarter ended September 30, 2009. OTA prepares a tax rate table to capture 

information relating to legislation that affects tax rates, tax basis, accounts, 

and deposit rules in effect during the quarter. 

 

24The transfer forms denote the amounts estimated by OTA for transferring excise taxes to the trust funds. 

25A positive amount indicates that the FMS adjustment increased excise taxes distributed to the trust fund. 

A negative amount, shown in parentheses, indicates that the FMS adjustment decreased excise taxes 

distributed to the trust fund. 

26OTA makes semimonthly estimates of excise tax collections for transfer to trust funds. There are five 

semimonthly estimates for the quarter ended September 30, 2009, which affect fiscal year 2009 

distributions to the AATF. 

 Page 12 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

B. Inspect the transfer forms and supporting schedules to determine if there is 

evidence of review. 

Description of Findings and Results

There was evidence that another OTA economist reviewed the transfer forms 

and supporting schedules affecting distributions from the general fund to the 

AATF for the quarter ended September 30, 2009. 

C. Calculate the totals on the transfer forms to determine if they are 

mathematically correct. 

Description of Findings and Results

The totals on the transfer forms affecting distributions to the AATF for the 

quarter ended September 30, 2009, were mathematically correct. 

D. Trace the transfer amounts for tax on transportation of persons by air 

(abstract 26), tax on the use of international air travel facilities (abstract 27), 

tax on transportation of property by air (abstract 28), and tax on kerosene for 

use in commercial aviation (abstract 77)27 from the transfer forms back to the 

related source documents28 for agreement. 

Description of Findings and Results

The transfer amounts for tax on transportation of persons by air (abstract 26), 

tax on the use of international air travel facilities (abstract 27), tax on 

transportation of property by air (abstract 28), and tax on kerosene for use in 

commercial aviation (abstract 77) from the transfer forms agreed with the 

related source documents for the quarter ended September 30, 2009. 

 

27The OTA estimated transfer amounts for tax on transportation of persons by air (abstract 26), tax on the 

use of international air travel facilities (abstract 27), tax on transportation of property by air (abstract 28), 

and tax on kerosene for use in commercial aviation (abstract 77) made up over 97 percent of the total 

amount transferred to the AATF for the fourth quarter of fiscal year 2009. 

28The source documents include the IRS report of excise taxes used to derive the percentages applied to 

reported receipts, the Daily Treasury Statement, the Monthly Treasury Statement, and the excise tax rate 

table. 

 Page 13 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 
Enclosure 

 Page 14 GAO-10-92R Airport and Airway Trust Fund Excise Tax Procedures 

V. Other Procedures 

A. Determine if adjustments to the AATF for tax on kerosene used in aviation 

were made during fiscal year 2009 and calculate the adjustment amounts to 

determine if they were mathematically correct.29 

Description of Findings and Results

Adjustments to the AATF for tax on kerosene used in aviation were made 

during fiscal year 2009 and were mathematically correct. These amounts 

were30 

• $57,415,000 for the quarter ended September 30, 2008; 

• $46,055,000 for the quarter ended December 31, 2008; 

• $41,139,000 for the quarter ended March 31, 2009; 

• $38,549,000 for the quarter ended June 30, 2009; and 

• $51,890,000 for the quarter ended September 30, 2009. 

B. Using IRS’s quarterly certifications, OTA’s estimated distributions, and any 

adjustments, compile and report the amount of net excise taxes distributed to 

the AATF in fiscal year 2009. 

Description of Findings and Results

Based on a compilation of IRS’s quarterly certifications, OTA’s estimations, 

and adjustments, the amount of net excise taxes distributed to the AATF in 

fiscal year 2009 was $10,569,246,000. 

(196198) 

 

29Section 11161 of Pub. L. No. 109-59 (Aug. 10, 2005), Treatment of Kerosene for Use in Aviation, taxes all 

kerosene taxpayers at the standard kerosene rate, unless a taxpayer had removed the kerosene from a 

refinery or terminal directly into an aircraft’s fuel tank and thus qualified for the lower aviation kerosene 

tax rate. Amounts received under the standard kerosene tax are initially deposited in the HTF. If a 

taxpayer subsequently used the kerosene in aviation, the taxpayer is eligible for the lower tax rate 

associated with aviation kerosene and can request a refund. The amount of this refund is transferred from 

the HTF to the general fund. The amount of the kerosene tax collected from the taxpayer, net of refunds, is 

transferred from the HTF to the AATF. 

30The adjustments for the quarters ended September 30, 2008; December 31, 2008; March 31, 2009; and June 

30, 2009, were included in the IRS receipt certifications, and the adjustment for the quarter ended 

September 30, 2009, was included in the OTA estimates. The adjustment amounts represent excise taxes 

transferred to the AATF from the HTF. 
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