OMB No. 1545-1914 Low Sulfur Diesel Fuel Production Credit

Form 8896

© Attach to your tax return. Attachment

Sequence No. 142 Department of the TreasuryInternal Revenue Service

Name(s) shown on return Identifying number

1 Low sulfur diesel fuel produced (in gallons) 1

2 Multiply line 1 by $.05 2

5

6

3 Qualified costs limitation (see instructions)

6

Form 8896 (Rev. 1-2008)

Enter the smaller of line 5 or line 2

Cat. No. 37704F

Section references are to the Internal

Revenue Code.

Use Form 8896 to claim the low sulfur

diesel fuel production credit.

General Instructions

Purpose of Form

For Paperwork Reduction Act Notice, see instructions.

4 Total low sulfur diesel fuel production credits allowed for all prior tax years

5 Subtract line 4 from line 3

8 Add lines 6 and 7. Cooperatives go to line 9; partnerships and S corporations, report this amount 

on Schedule K; all others, report this amount on the applicable line of Form 3800 (e.g., line 1n

of the 2007 Form 3800) 8

3

4

7 Low sulfur diesel fuel production credit from partnerships, S corporations, and cooperatives 7

The credit generally is 5 cents for every

gallon of low sulfur diesel fuel produced by

a qualified small business refiner during the

tax year. However, the total credits allowed

for all tax years cannot be more than the

refiner’s qualified costs limitation on line 3.

This credit is part of the general business

credit.

Definitions

This is diesel fuel with a sulfur content of

15 parts per million or less.

Low Sulfur Diesel Fuel

exceed 205,000 barrels for the 1-year

period ending on December 31, 2002. To

figure the average daily domestic refinery

run or retained production, only include

refineries that were refineries of the refiner

or a related person (within the meaning of

section 613A(d)(3)) on April 1, 2003.

However, a refiner is not a small business

refiner for a tax year if more than 1,500

individuals are engaged in the refinery

operations of the business on any day

during the tax year.

(Rev. January 2008)

9 Amount allocated to the patrons of the cooperative 9

10 Subtract line 9 from line 8. Report this amount on the applicable line of Form 3800 (e.g., line 1n 

of the 2007 Form 3800) 10

What’s New

● Rev. Proc. 2007-69 provides guidance

on obtaining the required certification. See

Qualified Costs.

● The Tax Technical Corrections Act of

2007 clarified the adjustment required

when you deduct qualified costs under

section 179B and also claim this credit in

tax years ending after December 31, 2002.

See TIP on this page.

A small business refiner generally is a

refiner of crude oil with an average daily

domestic refinery run or average retained

production for all facilities that did not

Small Business Refiner

For each facility, qualified costs are costs

paid or incurred to comply with the

highway diesel fuel sulfur control

requirements of the Environmental

Protection Agency (EPA) during the period

beginning January 1, 2003, and ending on

the earlier of:

Qualified Costs

For more information, see section 45H.

Additional Information

● The date 1 year after the date on which

the refiner must comply with these EPA

requirements with respect to such facility

or

● December 31, 2009.

Qualified costs include costs for the

construction of new process operation

units or the dismantling and reconstruction

of existing process units to be used in the

production of low sulfur diesel fuel,

associated adjacent or offsite equipment

(including tankage, catalyst, and power

supply), engineering, construction period

interest, and site work.

In addition, the small business refiner

must obtain certification from the IRS

(which will consult with the EPA) that the

taxpayer’s qualified costs will result in

compliance with the applicable EPA

regulations. This certification must be

obtained not later than June 29, 2008, or,

if later, the date that is 30 months after the

first day of the first tax year in which the

credit is determined. For details, see Rev.

Proc. 2007-69 (available in I.R.B. 2007-49

at www.irs.gov/irb).

Specific Instructions

Use lines 1 through 6 to figure any low

sulfur diesel fuel production credit from

your own trade or business.

Cooperative Election To Allocate

Credit to Patrons

A cooperative described in section 1381(a)

can elect to allocate any part of the low

sulfur diesel fuel production credit among

the patrons of the cooperative. To make

the election, attach a statement to the

effect that the cooperative elects to

allocate the credit among the patrons

eligible to share in patronage dividends on

the basis of the quantity or value of

business done with or for the patrons for

the tax year.

The election is not effective unless:

● Made on a timely filed return (including

extensions). However, if the cooperative

made an election on a tax return for a tax

year ending after December 31, 2002, and

filed before June 15, 2006, but failed to

attach the required statement, the

cooperative may attach that statement to

the first federal income tax return it files

after June 14, 2006.

TIP

Unless you elect not to take this

credit, your deductions will be

reduced by the amount of your

credit. For details, see section

280C(d).

● The cooperative designates the

apportionment in a written notice mailed

to its patrons during the payment period

described in section 1382(d).

Taxpayers that are not partnerships, S

corporations, or cooperatives, and whose

only source of this credit is from those

pass-through entities, are not required to

complete or file this form. Instead, they

can report this credit directly on Form

3800.
Form 8896 (Rev. 1-2008) Page 2

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form

simpler, we would be happy to hear

from you. See the instructions for the tax

return with which this form is filed.

The time needed to complete and file

this form will vary depending on

individual circumstances. The estimated

burden for individual taxpayers filing this

form is approved under OMB control

number 1545-0074 and is included in

the estimates shown in the instructions

for their individual income tax return. The

estimated burden for all other taxpayers

who file this form is shown below.

Paperwork Reduction Act Notice. We

ask for the information on this form to

carry out the Internal Revenue laws of

the United States. You are required to

give us the information. We need it to

ensure that you are complying with

these laws and to allow us to figure and

collect the right amount of tax.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

control number. Books or records

relating to a form or its instructions must

be retained as long as their contents

On line 3, enter 25% of the qualified

costs (defined above) for the facility that

produced the fuel reported on line 1 if

your average daily domestic refinery

runs were not more than 155,000 barrels

for the 1-year period ending on

December 31, 2002. If your average

daily domestic refinery runs were more

than 155,000 barrels, the 25% is

reduced (but not below zero) by

multiplying it by 1 minus your excess

over 155,000 barrels divided by 50,000

barrels.

Line 3

Enter the total low sulfur diesel fuel

production credits allowed for all prior

tax years (as determined for line 6).

Line 4

Recordkeeping, 6 hr., 13 min.;

Learning about the law or the form, 45

min.;

Preparing and sending the form to the

IRS, 2 hr., 5 min.

Once made, the election cannot be

revoked.

Enter the number of gallons of diesel

fuel produced with a sulfur content of 15

parts per million or less.

Line 1

Example. Your average daily domestic

refinery runs were 165,000 barrels for

the 1-year period ending on December

31, 2002. First divide 10,000 (your

excess over 155,000 barrels) by 50,000

to get .2. Next subtract .2 from 1 to get

.8. Then multiply 25% by .8 to get 20%.

On line 3, enter 20% of the qualified

costs for the facility that produced the

fuel reported on line 1.

may become material in the

administration of any Internal Revenue

law. Generally, tax returns and return

information are confidential, as required

by section 6103.

If you timely file your return without

making an election, you can still make

the election by filing an amended return

with the statement within 6 months of

the due date of the return (excluding

extensions). Enter “Filed pursuant to

section 301.9100-2” on the amended

return.