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 Highway 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 Highway Trust 

Fund (HTF) 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 HTF. 

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 HTF during fiscal year 2009, (2) the 

Internal Revenue Service’s (IRS) quarterly HTF receipt certifications during fiscal 

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

adjustments to HTF 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 HTF for the fourth quarter of fiscal year 

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

year 2009, and (6) the amount of net excise taxes distributed to the HTF 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 HTF 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-10-93R Highway Trust Fund Excise Tax Procedures
Page 2 GAO-10-93R Highway 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 

Highway Trust Fund Excise Tax Procedures and Results 

I. Procedures on Transactions That Represent the Underlying Basis of 

Amounts Distributed to the Highway Trust Fund (HTF) in Fiscal Year 

2009 

A. Nonstatistical selection of tax returns from the quarters ended 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 HTF and the Airport and Airway Trust Fund (AATF) 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 HTF 

and the AATF 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, 20 contained primarily HTF-related tax 

liabilities and 10 contained primarily AATF-related tax liabilities. 

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, 20 contained primarily HTF-

 

1

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

to the HTF 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. HTF administrators recorded the adjustment amount on the HTF financial 

statements 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 HTF 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-10-93R Highway Trust Fund Excise Tax Procedures 
Enclosure 

related tax liabilities and 10 contained primarily AATF-related tax 

liabilities. 

2. For each of the 40 returns related primarily to the HTF from the quarters 

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

procedures:5

(a) Compare the assessment amounts for abstracts6

 60 and 62 from the tax 

return to IRS’s master file for agreement. 

Description of Findings and Results

The assessment amounts for abstracts 60 and 62 on the tax return 

agreed with the master file for all 40 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 assessment amounts for the selected abstracts were 

mathematically correct on all 40 returns. 

 

5

These procedures encompassed approximately $13.4 billion in prorated collections affecting distributions 

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

HTF, we selected (1) diesel fuel tax (abstract 60) and (2) gasoline tax (abstract 62). 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). 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 84 percent of the total amount 

certified to the HTF and over 94 percent of the total amount certified to the AATF for the quarters ended 

June 30, 2008, and September 30, 2008. 

Page 4 GAO-10-93R Highway 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 the Collection Certification 

System audit files for all 40 returns. 

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 

(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.8

 

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.9

 

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 

 

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

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. 

9

This 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. 

Page 5 GAO-10-93R Highway Trust Fund Excise Tax Procedures 
Enclosure 

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.10 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. 

(d) Sum the prorated collections for selected abstracts11 from the audit files 

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

Collection12 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) HTF, (2) AATF, and (3) other 

excise tax abstracts. 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.13 

 

10For 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. 

11The selected abstracts are (1) diesel fuel tax (abstract 60), (2) gasoline tax (abstract 62), (3) tax on 

transportation of persons by air (abstract 26), (4) tax on the use of international air travel facilities 

(abstract 27), (5) tax on transportation of property by air (abstract 28), and (6) tax on kerosene for use in 

commercial aviation (abstract 77). The tax amounts for the two HTF-related abstracts made up over 91 

percent of the total amount certified to the HTF, and the tax amounts for the four AATF-related abstracts 

made up over 98 percent of the total amount certified to the AATF for the quarters ended December 31, 

2008, and March 31, 2009. 

12The Report of Excise Tax Collection contains prorated collections, classified by abstracts, which serve as 

the basis for IRS’s quarterly trust fund certifications. 

13The $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. 

Page 6 GAO-10-93R Highway Trust Fund Excise Tax Procedures 
Enclosure 

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 9014 prorated collections for the 

HTF for the first two quarters of fiscal year 2009. 

(f) Select samples of prorated excise tax collections from the two non-HTF 

populations. 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.15 Select a random attribute 

sample of 45 items from the population of prorated tax collections 

related to all excise taxes other than the HTF and the AATF.16 

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 6117 prorated collections for the 

AATF 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 HTF and the AATF. 

2. Procedures on transactions 

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

population: 

 

14The planned sample size using MUS was 135 items. MUS selects dollars versus specific transaction items 

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

HTF was $133 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 $266 

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

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

15The $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. 

16For 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. 

17The planned sample size using MUS was 116 items. As explained in footnote 14, MUS selects dollars 

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

intervals. The dollar interval for AATF was $43 million. Because large-dollar items cover more than one 

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

Page 7 GAO-10-93R Highway Trust Fund Excise Tax Procedures 
Enclosure 

• 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 90 sampled items. 

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

item to determine whether the amount is mathematically correct. 

Description of Findings and Results

The assessment amount on the tax return was mathematically 

correct for 89 of the 90 sampled items. For one sample item 

involving abstract 62 for the quarter ended March 31, 2009, a 

taxpayer reported an assessment amount of $32,614,638 on its tax 

return. However, based on the number of gallons reported by the 

taxpayer, the assessment amount should have been $34,084,865, a 

difference of $1,470,227. 

• 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 

89 of the 90 sampled items. As discussed previously, a taxpayer 

miscalculated the assessment amount on its tax return for one 

sampled item involving abstract 62 for the quarter ended March 31, 

2009. The taxpayer underreported the assessment amount by 

$1,470,227. As a result of the taxpayer error, the prorated collection 

amount for abstract 62 was understated by $513,228. Additionally, 

this error resulted in a $501,720 overstatement of the prorated 

collection amount for abstract 60. Since IRS compiles the amounts 

of various prorated excise taxes in its certification to the HTF, the 

error resulted in the HTF receiving $10,775 less in excise tax 

distributions than it should have for the quarter ended March 31, 

2009.18

 

18 The net effect of the understatement to abstract 62 and the overstatement to abstract 60 was an 

understatement to prorated collections of $11,508. The effect on distributions to the HTF is less than the 

total amount of the understated prorated collections because not the entire amount of the prorated 

collection for each type of tax is certified and distributed to the HTF. For example, $0.183 of the $0.184 

collected on each gallon of gasoline is certified and distributed to the HTF. 

Page 8 GAO-10-93R Highway Trust Fund Excise Tax Procedures 
Enclosure 

Although IRS identified the error and obtained an amended return 

from the taxpayer, it was unable to record the correction to the 

taxpayer’s master file account module19 until August 2009. This was 

after the cut-off date for IRS’s excise tax certification to the HTF for 

the quarter ended March 31, 2009. However, the correction was 

included in IRS’s excise tax certification to the HTF for the quarter 

ended June 30, 2009. Since IRS’s excise tax certification for the 

quarter ended June 30, 2009, is included in determining excise tax 

distributions to the HTF for fiscal year 2009, the error had no net 

effect on the dollar amount of excise tax distributions to the HTF 

for fiscal year 2009. 

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

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

they contain any HTF excise tax collections. 

Description of Findings and Results

The two samples of prorated collections from the non-HTF populations 

did not contain any HTF 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 ($2.3 million) with an upper error limit of $215 million at the 80 

percent confidence level. 

II. Procedures on IRS’s Quarterly HTF Receipt Certifications 

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

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

June 30, 2009: 

A. Inspect the certification letters20 for authorizing signatures. 

 

19A 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.). 

20IRS prepares two certification letters for the HTF each quarter: one for the Highway Account and the 

other for the Mass Transit Account. 

Page 9 GAO-10-93R Highway Trust Fund Excise Tax Procedures 
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Description of Findings and Results

The certification letters for all four quarters had authorizing signatures. 

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 diesel fuel tax (abstract 60) and gasoline tax 

(abstract 62)21 from the certification letters back to the Report of Excise Tax 

Collection22 and the Treasury 90 Report23 for agreement. 

Description of Findings and Results

The certified amounts for diesel fuel tax (abstract 60) and gasoline tax 

(abstract 62) from the certification letters agreed with the related Report of 

Excise Tax Collection and the Treasury 90 Report for all four quarters. 

E. Compare the distribution rates used by IRS for diesel fuel tax (abstract 60) 

and gasoline tax (abstract 62) for agreement with the applicable laws. 

 

21The certified amounts for diesel fuel tax (abstract 60) and gasoline tax (abstract 62), along with the heavy 

vehicle use tax (traced separately), made up over 92 percent of the total amount certified to the HTF for 

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

22IRS 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. 

23The 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-10-93R Highway Trust Fund Excise Tax Procedures 
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Description of Findings and Results

The distribution rates used by IRS for diesel fuel tax (abstract 60) and 

gasoline tax (abstract 62) 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 significant24 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; December 31, 2008; and March 31, 2009, did not 

contain significant collections from prior quarters. 

For the quarter ended June 30, 2009, the Report of Excise Tax Collection used 

in the certification contained approximately $275 million from prior quarters. 

Due to taxpayer errors and delays by IRS in posting tax return information to 

taxpayer master file account modules, four large-dollar excise tax returns 

containing primarily HTF excise taxes were omitted from IRS’s excise tax 

certification to the HTF for the quarter ended March 31, 2009. 

Although IRS eventually posted the return to the taxpayers’ master file 

account modules, this was not done in time for the return information to be 

included in IRS’s excise tax certification to the HTF for the quarter ended 

March 31, 2009. Since IRS’s excise tax certifications to the HTF for the 

quarters ended March 31, 2009, and June 30, 2009, are both used in 

determining fiscal year 2009 excise tax distributions to the HTF, this had no 

effect on excise tax distributions to the HTF for fiscal year 2009. 

G. Trace heavy vehicle use tax amounts from the Highway Account certification 

letters to the master file and Treasury 90 Report.

25

 

Description of Findings and Results

The heavy vehicle use tax amounts from the Highway Account certification 

letters agreed with the master file and Treasury 90 Report for all four 

quarters. 

 

24For this procedure, “significant” is defined as $185 million, which represents approximately 2 percent of 

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

2008; March 31, 2009; and June 30, 2009. 

25These taxes, which go to the HTF, are reported on Form 2290 and are not included in the Collection 

Certification System. 

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III. Procedures on Financial Management Service Adjustments 

Perform the following procedures on Financial Management Service (FMS) 

adjustments to HTF 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 forms26 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. For the Highway Account, the adjustment amounts were27

 

• ($149,862,000) for the quarter ended September 30, 2008; 

• ($136,806,000) for the quarter ended December 31, 2008; 

• ($509,330,000) for the quarter ended March 31, 2009; and 

• ($1,177,611,000) for the quarter ended June 30, 2009. 

For the Mass Transit Account, the adjustment amounts were 

• ($26,282,000) for the quarter ended September 30, 2008; 

• ($23,667,000) for the quarter ended December 31, 2008; 

• ($55,872,000) for the quarter ended March 31, 2009; and 

• ($137,034,000) for the quarter ended June 30, 2009. 

IV. Procedures on Excise Tax Distributions to the HTF 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 estimates28 was in place 

during the quarter ended September 30, 2009. 

 

26The transfer forms denote the amounts estimated by OTA for transferring excise taxes to the trust funds. 

27A positive amount indicates that the FMS adjustment increased excise taxes distributed to the account. A 

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

distributed to the account. 

28OTA 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 HTF. 

Page 12 GAO-10-93R Highway Trust Fund Excise Tax Procedures 
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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. 

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 

HTF 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 HTF for the 

quarter ended September 30, 2009, were mathematically correct. 

D. Trace the transfer amounts for diesel fuel tax (abstract 60), gasoline tax 

(abstract 62), and heavy vehicle use tax29 from the transfer forms back to the 

related source documents30 for agreement. 

Description of Findings and Results

The transfer amounts for diesel fuel tax (abstract 60), gasoline tax (abstract 

62), and heavy vehicle use tax from the transfer forms agreed with the related 

source documents for the quarter ended September 30, 2009. 

 

29The OTA estimated transfer amounts for diesel fuel tax (abstract 60), gasoline tax (abstract 62), and 

heavy vehicle use tax made up over 92 percent of the total amount transferred to the HTF for the fourth 

quarter of fiscal year 2009. 

30The 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-10-93R Highway Trust Fund Excise Tax Procedures 
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V. Other Procedures 

A. Determine if adjustments to the HTF 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.31 

Description of Findings and Results

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

during fiscal year 2009 and were mathematically correct. For the Highway 

Account, the adjustment amounts were32

• ($175,148,000) for the quarter ended September 30, 2008; 

• ($146,149,000) for the quarter ended December 31, 2008; 

• ($130,115,000) for the quarter ended March 31, 2009; 

• ($133,812,000) for the quarter ended June 30, 2009; and 

• ($158,292,000) for the quarter ended September 30, 2009. 

 For the Mass Transit Account, the adjustment amounts were 

• ($23,365,000) for the quarter ended September 30, 2008; 

• ($19,497,000) for the quarter ended December 31, 2008; 

• ($17,358,000) for the quarter ended March 31, 2009; 

• ($17,851,000) for the quarter ended June 30, 2009; and 

• ($21,116,000) for the quarter ended September 30, 2009. 

 

31Section 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. 

32The 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, shown in parentheses, 

represent excise taxes transferred from the HTF to the AATF and general fund. 

Page 14 GAO-10-93R Highway Trust Fund Excise Tax Procedures 
Enclosure 

Page 15 GAO-10-93R Highway Trust Fund Excise Tax Procedures 

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

adjustments, compile and report the amount of net excise taxes and penalties33

distributed to the HTF 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 HTF in 

fiscal year 2009 was $34,943,799,000. 

(196199) 

 

33Section 868 of Pub. L. No. 108-357 (Oct. 22, 2004), Dedication of Revenues from Certain Penalties to the 

Highway Trust Fund, requires that certain fuel-related penalties, which are assessed and collected by IRS, 

be distributed to the HTF. IRS began including such amounts in its quarterly certification to the HTF for 

the quarter ended September 30, 2008. However, such penalties represent less than 0.06 of one percent of 

the amount certified to the HTF each quarter. 
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