Currently, the Internal Revenue Code (IRC) provides for the following trust funds:

Taxpayers are required to file either a Form 720, Quarterly Federal Excise Tax Return, or Form 2290, Heavy Vehicle Use Tax Return (HVUT), to report the tax liability. The Form 720, Quarterly Federal Excise Tax Return, reports the excise tax quarterly by abstract number, which identifies the tax. The Form 2290, Heavy Vehicle Use Tax Return (HVUT), reports taxes for July 1 through June 30 or for the period following a vehicle's first use.

Form 720, Quarterly Federal Excise Tax Return, tax deposits are generally made semi-monthly with Form 8109, Federal Tax Deposit Coupon Book, or electronically through the Electronic Federal Tax Payment System (EFTPS). Semi-monthly deposits are generally required in advance of the return.

Under IRC Section 9601, Transfer of Amounts, excise taxes dedicated to the trust funds must be transferred by the Bureau of the Fiscal Service at least monthly, based on estimates by the Office of Tax Analysis, from the general fund to the trust fund. When the Bureau of the Fiscal Service receives the certification reporting the actual collections for the affected quarter, adjustments are made to true-up the amounts transferred.

Custodial Reporting is responsible for determining the amount of trust fund collection credits and preparing both the collection, and the refunds and credits, certifications. The collection certification process is completed about five months after the end of the quarter or about four months after the return due date.

The quarterly refunds and credits certifications are due to the Bureau of the Fiscal Service no later than the 1st week of February, May, August and the last week of September. The trust fund collection certifications are due to the Bureau of the Fiscal Service the 1st week of February, May, August and the first week of October.

To prepare the refunds and credits certifications, the analyst uses information provided by the SPC and the Redesigned Revenue Accounting Control System (RRACS). To prepare the trust fund collection certifications, the analyst uses information provided by applications development, which is obtained from master file extracts of collections made during the previous quarter for all Form 720, Quarterly Federal Excise Tax Return, returns on the master files.

The authorities for this IRM include:

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

Termination of Transfers from Highway Trust Fund for Certain Repayments and Credits, Pub. L. No. 111-147 (2010), Section 444

This section provides responsibilities for:

Program Reports: Data sources include Control-D, AQETL, and the Integrated Data Retrieval Systems (IDRS).

Program Effectiveness: The effectiveness of the activities performed by SPC reports analysts and the Custodial Reporting excise analysts’ quarterly certifications is measured by the preparation and issuance of error-free source documents and certifications.

Access to IDRS is limited to campus reports analysts and their management.

Access to AQETL is limited to the excise analysts at the Cincinnati campus and headquarters and access to the excise shared drive is limited to the headquarters excise analysts and chief.

Required review checklist for completeness and accuracy must be performed by a Custodial Reporting management official/team lead. The checklist is specific to the reviewer and is signed upon completion.

Required review checklist for completeness and accuracy must be performed by the chief, Custodial Reporting. The checklist is specific to the chief and is signed upon completion.

The following terms and definitions apply to this program.

The following acronyms apply to this program.

Microsoft Excel is a tool used to verify data and report support information used by SPC analysts.

The NTRR is compiled in the SPC with the source data being derived manually systemically. This is a report of all refund checks sorted by tax class. Some of the tax classes have sub-divisions for more detailed reporting.

A daily NTRR is generated through the IDRS indicating manual refunds processed through that system. In certain cases, more than one line number may apply to one Master File Tax Account Code (MFT).

Manually prepared refunds applicable to excise taxes paid for fuels originally reported on Form 720, Quarterly Federal Excise Tax Return, for excise taxes dedicated to the HTF and the AATF are reported as separate line items. (Refer to lines 71 through 79 and 99 on the NTRR.)

The refund claim is made by the ultimate purchaser. The claim is filed using Form 8849, Claim for Refund of Excise Taxes, Schedule 1, Nontaxable Use of Fuels. The claim must be at least $750. The $750 amount may be met by making a claim for fuel used during any quarter of the claimant's income tax year or aggregating amounts from any quarters of the claimant's income tax year for which no other claim has been made. If the dollar amount and/or the time for filing requirements are not met, an annual claim using Form 4136, Credit for Federal Tax Paid on Fuels, must be filed.

The law normally forbids the payment of interest on quarterly fuel tax refunds claimed. See IRS Publication 378, Fuel Tax Credits.

Most HTF and AATF refunds should not appear on the NTRR because the Form 8849, Claim for Refund of Excise Taxes, claims should be processed by excise adjustments for posting on the Master Files before refunding; therefore:

The IRS certifies the refunds for the trust funds quarterly to Treasury.

Contact a CFO headquarters excise tax analyst if there are any questions or for additional information.

The T-90 report includes data from Form 4136, Credit for Federal Tax Paid on Fuels, filed with income tax returns (Form 1040, U.S. Individual Income Tax Return; Form 1120, U.S. Corporation Income Tax Return; Form 720, Quarterly Federal Excise Tax Return, Quarterly Federal Excise Tax Return Schedule C; Form 1041, U.S. Income Tax Return for Estates and Trusts; Form 990-C, Farmer’s Cooperative Association Income Tax Return; and Form 990-T, Exempt Organization Business Income Tax Return) and Form 8849, Claim for Refund of Excise Taxes. This data is compiled in each SPC containing gas and other credits claimed with returns and Form 8849, Claim for Refund of Excise Taxes, claims plus audit and DP tax adjustments reflecting adjustments to T-90 data. The report also includes credits claimed on Form 720, Quarterly Federal Excise Tax Return, Quarterly Federal Excise Tax Return, Schedule C, and adjustments to Schedule C.

The T-90 Report is compiled from both the BMF and IMF data processed through the Tape Edit Process (TEP).

The T-90 GAS-01-04 reports are prepared by each SPC and sent to CFO headquarters quarterly. Weekly, the service centers should monitor the reports data to ensure the year-to-date (YTD) data is correct. Weekly reviews allow for any report problem to be researched promptly before the source data tapes are scratched.

Treasury Reports Master File GAS-01-04 is scheduled and generated automatically as follows:

Treasury Reports Master File Control Printouts

The report is due to CFO headquarters by close of business on the fifth workday after the close of the quarter being reported (see IRM 3.30.123, Processing Timeliness).

The T-90 should be reviewed for reasonableness before it is sent to CFO headquarters. Any unusual increase or decrease in the counts and amounts reported for each quarter should be confirmed. The findings should be reported or noted on the quarterly report.

Confirm and explain any negative amount shown on the reports. Typically, these will be corrections to prior quarters’ data that were previously reported.

Ensure that the current Weekly and Quarter-To-Date counts and amounts are correctly totaled for the Quarter and Year-To-Date (Cumulative, or Cum) - Total, on the report. Ensure that for the first calendar quarter, which is for the quarter ended March 31, that the Weekly and Quarter-To-Date amount equals the Quarter and Year-To-Date - Cum Total.

Ensure that the Year-To-Date - Cum Total equals the sum of the calendar quarters reported to date. For example, the sum of the amounts for the March and June quarters will equal the Year-To-Date - Cum at June 30.

The specific credits allowed for T–90 Credits are presented in a table format. This table corresponds to the line items on the T–90 report. The table illustrates the credits allowed and the tax years for the allowable credits. See Exhibit 7, Credit Reference Numbers.

The T-90 report is divided into seven segments. Pages one and two represent credits claimed with income tax returns on Form 4136, Credit for Federal Tax Paid on Fuels. Pages three and four represent credits claimed with Form 8849, Claim for Refund of Excise Taxes. Amended returns data is also included in pages three and four data. Page five is for credits claimed on Form 720, Quarterly Federal Excise Tax Return, Quarterly Federal Excise Tax Return, Schedule C, and page six is for adjustments to these credits. Page seven is a summary page.

IRS certifies the fuel tax credits to Treasury's Bureau of the Fiscal Service quarterly. These credits are charged to the AATF, HTF and other trust funds; therefore, it is important that these credits are reported correctly on the T–90.

When there is a program change to add new CRNs, the program change must be run after the quarterly and YTD reports. When this happens, there is a reformatting of the report which requires the YTD data to restart from the date of the program change; the following may occur:

This section lists the areas that provide information related to credits and refunds reported on the T–90 reports for the IMF and the BMF. The general functional areas are:

Credits claimed that are passed on to the T–90 originate from:

The T–90 related credits may be claimed on the following forms:

List of Returns and Master Files involved are:

This report consists of seven pages for credit amounts plus statistics:

Line Items Counts are from the line items listed on the T–90 that equate to the line items on the Form 4136, Credit for Federal Taxes Paid on Fuels. Be aware that Form 4136, Credit for Federal Taxes Paid on Fuels, may have two or more line-items present.

Dollar Claim Ranges are listed on the left side under Line Numbers 1 through 23.

Total Counts—Line Items are on line number 24 for the totals for each data column.

Counts are stratified into two sections with four columns each. The two sections are:

Each section's four columns represent the counts for six reports of credit data:

Line Items to be researched will be found on the Form 4136, Credit for Federal Tax Paid on Fuels, Stratification Report, in the:

Page 6 is a Claims Dollar Stratification Report - Form 4136 (totals from Form 4136, Credit for Federal Tax Paid on Fuels):

Page 7 is a Recap of Counts and Average Items and claims on Form 4136, Credit for Federal Tax Paid on Fuels, and Form 8849, Claim for Refund of Excise Taxes.

Line numbers 25 through 30 identify the:

Line 27 Average Line-Item Amount:

Line 29 Average Form 4136 Amount:

Line 30 is the difference between lines 27 and 29.

P–R–F GAS–01–40: This Week and Quarter-To-Date (QTD)

P–R–F GAS–01–42: This Quarter and YTD

P–R–F GAS–01–44: Gas Adjustment List - shows valid adjustments list for this pass.

P–R–F GAS–01–46: Gas Adjustment Error List - shows invalid adjustments for this pass.

Consists of seven sections with one or more pages per section.

The Daily Extract Reports GMF–15–48 to 15–53 have eight columns of data in each section.

These runs provide control totals to be used for balancing to the totals on the T–90 reports.

The "Today's Totals" line from the daily extract reports should be recorded and accumulated on a manually prepared control work sheet.

The control work sheet will serve as a log of the inputs and totals to be accumulated for control purposes. Two sets of worksheets will be required:

The proposed control work sheet column format, for example, would be:

There are six sections to match up to Pages 1 through 6 of GAS–01–04:

Control Work Sheets are required weekly and quarterly.

Establish a control work sheet for the calendar year by:

The accumulated sum of the daily extract report totals for the week, usually five processing days, will equal the respective sums printed under the week column on the "Weekly and Quarter-To-Date" T–90 report. The "Quarter-To-Date" column respective totals will equal the sum of the week's totals accumulated into the current calendar quarter totals.

The T–90 reports are calendar year cum reports. There are two sets. First, the "Weekly and Quarter-To-Date" kept by the SPC, and second, the "Quarter-To-Date and YTD" which is sent to CFO headquarters at the end of each quarter. The totals of these reports must be reconciled to the Control Work Sheet totals. At the end of each calendar quarter, the accumulated sum(s) of the quarter-to-date "QTD" columns must equal the "YTD" columns totals.

The proof totals should equal the GAS–01–04 report's totals except for rounding adjustments.

Documents that report credits should be sampled regularly to ensure valid processing and extraction of the credits. Each of the sections must be scanned to look for unusually large credits or reversals that should be confirmed as per the following as minimum guides:

Select at least the following number of documents each month to ensure the minimum amount of review is being done (Consult with the T–90 analyst for any assistance needed to arrive at a reasonable level of review for your SPC):

The credit amount is confirmed by requisitioning the return or Form 8849, Claim for Refund of Excise Taxes, to determine if an appropriate supporting form is attached, or if the claimant input information correctly. If not, then a correction must be made to back the credit out of the report or correct it on the report.

Confirming credits on a selective or random sampling basis is necessary to ensure the integrity of the credits allowed and to confirm that there are no processing or systemic problems.

If there are several large dollar amount credits present, select only one or two documents for each MFT and document code.

Always review requisition documents to confirm credits for:

The Form 720, Quarterly Federal Excise Tax Return, Quarterly Federal Excise Tax Return, Schedule C items are verified in Cincinnati Excise Compliance for large returns.

Maintain a work sheet to accumulate the adjustments required for the quarter. Record the MMDDYYYY for the quarter.

Record each correction adjustment separately. This will:

Correction adjustments should only be combined by line items if the number is excessive due to systemic problems.

Make sure all correction adjustments are input before the end of each calendar quarter and the end of each year. This will prevent the need to footnote reports for:

Correction information must include:

Compute separately for each of the T–90 pages:

The amounts are entered by line item and are converted to CRNs on the T–90 reports. After 2008, they are entered by CRN, like the Form 8849, Claim for Refund of Excise Taxes and Form 720, Quarterly Federal Excise Tax Return, Schedule C.

The averages are computed for both the current period (Week or Quarter-To- Date), and cumulative period (Quarter or Year-To-Date).

These average amounts and counts should be used as a guide to determine if there are large dollar amount claims that should be confirmed.

Be aware that a single Form 4136, Credit for Federal Tax Paid on Fuels, may have more than one line item credit present.

Each credit/claim will be included for each of the four T–90 reports. There are two reports:

The counts shown on these two reports are shown by dollar ranges and they should be used to ensure that large amount claims are considered for confirmation.

Individual Form 4136, Credit for Federal Tax Paid on Fuels, credits/claims may be determined by reviewing the daily Document Locator Number (DLN) listings.

These two reports may be useful to various IRS examination, adjustment and other functions interested in detecting fraudulent claims. These reports can provide statistics for screening, reviewing and auditing claims.

Data from the four T–90 reports are recapped to provide a summary of claims processing.

Total dollar amounts should equal the total amounts from the four T–90 reports.

Advise CFO headquarters of any material change in counts or average amounts. Otherwise, the analysis will be performed by those functions concerned with claims processing, reviewing, and auditing.

Ensure the three statistical reports, pages 5, 6 and 7, are also sent along with the T–90 reports to CFO headquarters quarterly.

Invalid claims are those that were coded or processed as Form 4136, Credit for Federal Tax Paid on Fuels, claims in error.

Invalid claims disposition - correct.

Potentially fraudulent claims are those that may be totally invalid. Here are some indicators:

Perform the following steps if a potentially fraudulent claim is identified:

Any credits with CRN 318 should be requisitioned and confirmed.

Whenever it has been determined that an adjustment is necessary to the Reports Cum File because of a programming error, send a memorandum to the CFO Custodial Reporting office giving the following information:

Correction adjustments for revenue receipts for both the BMF and the IMF reports are made to the Automated Non Master File (ANMF) report generated in Kansas City.

Errors discovered after the review of the T–90 reports, DLN listings and random confirmations must be corrected on subsequent T–90 reports.

T–90 errors fall into two categories. The category type depends on if:

The category types of error impact conditions are:

If errors impact the taxpayer's MF account, then the following steps should occur:

If the error is over $100,000, advise CFO headquarters of the pending correction.

T–90 errors or questionable items are normally either:

Determine the source type of error (the types are on pages one to six):

Determine on which CRN the item to be corrected was first reported.

List the corrective actions on the T–90 correction work sheet:

Proposed format of T–90 correction work sheet:

Present this T-90 correction work sheet to the technician to enter on the demand terminal.

Record corrections +/− on the T–90 controls. The new T–90 YTD should match the revised control totals (YTD plus/minus corrections).

Maintain a historical record of all corrections.

The computer-generated operating reports are available through Control-D for printing and review.

The excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, are divided into monitoring groups.

Each excise tax reported is identified by an IRS number (abstract), excise tax description, trust fund (if applicable) and other information.

The Cincinnati RA should allocate sufficient time to and prioritize accomplishing the monitoring tasks promptly after the AQETL is updated with new data.

The Cincinnati RA should be able to estimate the amount of initial time needed to monitor the number of accounts requiring review based on the:

The Cincinnati RA may determine the status of the Form 720, Quarterly Federal Excise Tax Return, account monitoring based on the volume of accounts listed on the "Million-Dollar" reports.

The primary purpose of the communication with CFO headquarters via AQETL is to:

The secondary purpose is for Cincinnati RAs to determine:

The reports analysts can ensure responsive and timely monitoring by:

Prompt and reasonable time frame monitoring guidelines enable:

Factors increasing monitoring needs include:

Monitoring timeliness response is normally considered met if:

Reports Analysts reporting to the CFO headquarters:

Top 100 Form 720, Quarterly Federal Excise Tax Return Filers Tax Period 20XXXX:

TREAS–92, Summary of Excise Tax Liabilities Report, includes data from:

TREAS–92 is fiscal year to date report ending each 9-30-YYYY.

TREAS–92 generates monthly for: transactions 180–40–11, and ECC posted 180–50–11. The automated report is 180–52–11.

Excise tax detail data is listed by abstract number and dollar amount (no cents). Abstract numbers and amounts are listed in groups for the trust funds and the general account.

TREAS–92, Summary of Excise Tax Liabilities, is reviewed quarterly by CFO headquarters.

The most effective review methods are:

Look for large CRNs related to abstracts for:

Negative figures are more likely to appear on the TREAS–92 report in the first months of the new FY before there are enough normal positive postings to absorb any negative postings.

Look for normal increases in the dollar amounts reported for those taxes when the:

Look for no change or a minor change up/down when the:

Look for decrease in the dollar amounts reported when the:

Look for large increases or decreases when:

The SPC RA monitoring schedule should evolve around the receipt of the monitoring reports received weekly and monthly.

Weekly, review the AQETL which lists current and prior TXPD postings.

Weekly, review the Weekly Posted Million-Dollar BMF Records Report using Control-D.

Perform a visual study of the report to determine:

Monthly, review the Million-Dollar BMF Records Report to ensure all errors are accounted for. The weekly listings are reviewed using Control-D.

Quarterly, review the Form 720 IRS Numbers Count Report to determine if the counts are reasonable and there are no material exceptions.

Monitor the Form 720 IRS Numbers Count Report. SPC RAs should record counts in an Excel spreadsheet.

Monitor the Posted Million-Dollar reports received weekly and monthly via Control-D.

Maintain a file of returns reviewed. Copies are made from returns obtained from:

Use other systems as follows:

The AQETL report extracts Form 720, Quarterly Federal Excise Tax Return, postings.

The criteria for extraction are based on:

Dollar amounts by abstract number is key for extraction:

The extraction criteria are determined by the CFO headquarters analysts.

The AQETL is extracted at ECC Martinsburg from the BMF Form 720, Quarterly Federal Excise Tax Return, and adjustment data.

The AQETL is downloaded weekly.

The AQETL lists all TCs 150, 29X, 30X and 370 posted by TXPD and cycle.

Follow up on adjustment requests (TC29X) that did not post in the quarter just ended. Adjustments of $5,000 or more for each abstract will appear on the monthly Million-Dollar BMF Reports Records Listing. Those under $5,000 can be confirmed on IDRS or the AQETL.

Review the first two or three quarters' filings of new companies on the AQETL to ensure the abstracts reported are consistent and logical for that TP. If questionable, obtain returns to determine the issue. If necessary, contact TP to resolve the problem.

Follow up all postings to abstract No. 80 "unapplied or unidentified amounts" to ensure that the amount is transferred to the correct abstract, usually by TC 29X. These must be transferred to the correct abstract, so they appear on the proper certification.

See separate review instructions for "TC 370 Account Transfer-in Review."

Monthly monitoring of the Highway Use Tax (HUT) reported on Form 2290 ensures data is reasonably consistent with prior year periods.

It is normal for AATF abstracts: 13, 14, 26, 27, 28, 69 and 77 to be reported by airline passenger, airline freight and airport service businesses.

It is normal for a full-service airline to report any combination of 26, 27 and 28. Domestic airline passenger service firms would be 26, airlines with international departures would be 27, and airline freight would be 28.

It is normal for firms providing airplane and airport services to report tax on fuels used in noncommercial aviation as follows: Aviation gasoline fuels as 14, and aviation fuel (other than gasoline) as 69. Normally 14 is smaller than 69 when both are present together for air service filers. If a firm is not an air service filer, then any combination of 14 and 69 with 62, or 14 and 62 is usually an error. To confirm the error, compare to prior TXPDs, confirm the NAIC, obtain and inspect the Form 720, Quarterly Federal Excise Tax Return, for that TXPD, and if necessary, check with the taxpayer.

An air freight firm will normally only report 28, not 26 or 27.

A common error is abstract 26 being reported or posted as 22.

If Form 720, Quarterly Federal Excise Tax Return, filer is an airline, correct without securing the return. If any doubt, secure the return to confirm.

Another common error is for 26 and 27 to be reported as 27 and 28. Secure the return to confirm and correct.

HTF Abstracts are: 33, 35, 60, 62, 104, 112, 117, 118, 120,121, 122, 123, 124.

Abstracts for tires are 108, 109 and 113. Some large auto or truck manufacturers report both tires, abstracts 108, 109 or 113 and retail tax, abstract 33.

Usually 60 and 62 are present together for oil companies.

Normally 62 is larger than 60 when reported together.

Abstract 35, kerosene, was effective starting in 1998. The rate of the tax for kerosene is the same as Diesel fuel Abstract 60.

Alternative fuel sources have been developed over the years which has caused abstracts to be removed, added and reorganized to track different types of fuels. The current abstracts are 79, 112, 118 and 120-124.

Number 40 is only valid for producer or importer of automobiles sold that do not meet certain fuel economy ratings per Form 6197.

If valid abstract 40, the tax is all dollars, there are no cents in the tax rate.

Normally manufacturers (includes producer or importer) of motor vehicles report abstract 40 Fuel Economy (Gas Guzzler). Although this is not part of HTF, many groups are interested in the amounts reported.

Earmarked funds abstracts 44 and 106 are normally reported in some combination by sporting goods companies.

It is most unusual for the earmarked abstracts to be reported with any others, such as: BLDF, HTF, AATF, and IWTF.

In the Revenue Reconciliation Act of 1997, Bows and Arrow were separated. Bows remain as Abstract 44. Abstract 102, Arrows—Component Parts, was effective September 30, 1997 to March 31, 2005. Abstract 106, Arrow Shafts, was effective April 1, 2005.

Abstract 64 is reported by users (barge lines) of Inland Waterways.

Normally only abstract 64 is present unless abstract 125 is also required.

The NAIC Code is usually 483000.

Most abstract 51 (Alcohol sold as, but not used as fuel) posts should be abstract 62 and should not be on a Form 720, Quarterly Federal Excise Tax Return.

Secure the Form 720, Quarterly Federal Excise Tax Return, to confirm and correct.

Abstract 51 is a penalty type tax incurred when alcohol claimed as a credit on Form 6478 by the taxpayer is not used to make gasohol.

Abstract 31 is a penalty type tax incurred when brokers sell obligations (bonds) not in registered form.

Most abstract 31 posts should be on another abstract. It could be for the line 29 above or line 30 below. It could also be for a new abstract and the taxpayer listed under “Other Excise Taxes” in error, such as abstract 140.

Secure the Form 720, Quarterly Federal Excise Tax Return, as needed to confirm and correct abstract 31 to the appropriate abstract based on normal research.

The most common error is the posting of abstract 22, telephone tax, as abstract 26, Transportation of Persons by Air.

If the Form 720, Quarterly Federal Excise Tax Return, filer is a telephone company, correct without securing the return. If any doubt, secure the return to confirm.

Application of communications tax to prepaid telephone cards is reported under abstract 22 (telephone tax). The face amount of such card shall be treated as the amount paid for such communications services, that amount shall be treated as paid when the card is transferred by any telecommunications carrier to any person who is not such a carrier. Effective date - applies to amounts paid in calendar months beginning more than 60 days after the date (November 1, 1997) of the enactment of this Act. The enactment date was August 8, 1997.

The tax for long distance telephone charges has been revoked. In 2007, for Tax Year 2006, individuals or corporations could take a deduction for tax paid on long distance phone calls against their Forms 1040, U.S. Individual Income Tax Return, or business type returns.

Abstract 97 is reported by drug manufacturers, producers and importers. There may be increases or decreases as types of vaccines are added or removed from taxable vaccines.

Leaking Underground Storage Tank (LUST) taxes are imposed on sellers and users of fuels.

Abstract 30 is for reporting taxes attributable to premiums paid or credited to an insurer or reinsurer. Includes premiums on casualty insurance, indemnity bonds, life insurance, annuity contracts and reinsurance.

General foreign insurer type filers are:

The most common error is abstract 30 input as abstract 31, obligations not in registered form. This is usually caused by a taxpayer recording tax on the wrong line when the Form 720, Quarterly Federal Excise Tax Return, is revised. Correct from abstract 31 to abstract 30 if confirmed to be valid abstract 30. Valid abstract 30 filers can be determined from sources on AQETL by:

Refunds in past years have been allowed based on treaties with the United Kingdom, France and Bermuda.

IRC 444, election to retain a fiscal year, is a deposit for estimated taxes due for Form 1065, U.S. Return of Partnership Income and Form 1120-S, U.S. Income Tax Return for an S Corporation.

OSLTF was effective 1–1–90, TXPD 9003 through 1994 and it was reactivated in 2006. Taxes are on petroleum, both domestic and imported oil.

Oil Spill, abstract 18, domestic.

Oil Spill, abstract 21, imported.

Ozone-Depleting Chemicals (ODC) is on the manufacturer, producer or importer. See Exhibit 1.

ODC abstracts are 19 and 98.

Floor Stock taxes are abstract 19 and 98. Abstract 20 is tax on any ODC held for sale or use by anyone other than the manufacturer, producer and importer thereof. Due each 1–1–YYYY, if tax rate has increased on ODC held in inventory at 1–1–YYYY.

Annual floor stock due if:

ODC items are reported on Form 6627, Part IV.

Cruise Ship Passenger Tax was effective 1–1–90, TXPD 9003. The tax is for passengers on a commercial ship that has stateroom accommodations for at least 17 passengers and if the trip is for at least one night.

Tax is also imposed on passengers on ships engaged in gambling beyond the three-mile limit. Tax applies only once, at the time the passenger embarks or disembarks in the U.S. Tax is due when trip is fully paid to operator or operator's agent.

Common errors are:

The Affordable Care Act of 2010 established a new Internal Revenue Code section, 5000B that imposes a tax on indoor tanning services sold after June 30, 2010. The Act became law on March 23, 2010. This act created a new excise tax to be imposed on indoor tanning services.

The tax rate is 10% on the amount received for indoor tanning services.

The inception of this excise tax introduced a large volume of new and unfamiliar filers to the Form 720, Quarterly Federal Excise Tax Return. Some of the most common errors have been:

Research the AQETL and history, the filer’s name, and the NAIC code. If necessary, requisition the Form 720, Quarterly Federal Excise Tax Return, to confirm abstract 140.

The Health Care and Education Reconciliation Act of 2010 in conjunction with the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119, established a new Internal Revenue Code section 4191 that imposes a tax on certain medical devices. The new excise tax applies to sales of taxable medical devices after December 31, 2012.

The tax rate is 2.3% of the sale price of taxable medical device as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act (FFDCA), that is intended for humans.

In addition to the tax listed for abstract 136, the taxable medical device sales are also required to be listed on the Form 720, Quarterly Federal Excise Tax Return, and are captured during processing. Item Reference Number 812 is used to adjust this figure. The 812 is an adjustable information field.

A common error is tax processed under abstract 80, Unidentified.

Research the AQETL and history, the filer’s name, and NAIC code, and if necessary requisition the Form 720, Quarterly Federal Excise Tax Return, to confirm abstract 136. When adjusting abstract 136, remember to adjust item reference number 812 appropriately.

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act, P.L. 114-113) includes a two-year moratorium on the medical device excise tax imposed by IRC 4191. P.L. 115-120 extended the moratorium for an additional two years. Thus, the medical device excise tax does not apply to the sale of a taxable medical device by the manufacturer, producer or importer of the device during the period beginning on January 1, 2016 and ending on December 31, 2019.

The Patient Protection and Affordable Care Act (ACA) established the Patient-Centered Outcomes Research Institute (PCORI). The ACA created IRC 9511 to establish a Patient-Centered Outcomes Research Trust Fund (PCORTF). The legislation also created IRCs 4375, 4376, and 4377 that impose fees on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the Patient-Centered Outcomes Research Institute.

The fee is filed annually on Form 720, Quarterly Federal Excise Tax Return, and is processed in the second quarter. The fees for a plan year ending during a calendar year is due by July 31 of the following calendar year.

The fee is $1 per life for plan years ending between October 1, 2012 and September 30, 2013. The fee is $2 per life for plan years ending between October 1, 2013, and September 30, 2014. For subsequent years, the fee is the dollar amount for the previous year plus the percentage increase in the projected per capita amount of the National Health Expenditures released by the Department of Health and Human Services before the beginning of the fiscal year.

For 201306, the Form 720, Quarterly Federal Excise Tax Return, was filed for fees on plan years ending between October 1, 2012 and December 31, 2012. The fee was $1 per life.

For 201406, the Form 720, Quarterly Federal Excise Tax Return, was filed for fees on plan years ending between January 1, 2013 and December 31, 2013. The fee was $1 per life for plan year’s ending January 1, 2013 through September 30, 2013 and $2 per life for plan year’s ending October 1, 2013 through December 31, 2013.

The PCORI tax has two subsections that are captured, the Specified Health Insurance Policies (SHIP) and Applicable Self-Insured Health Plans (ASIHP). The SHIP and ASIHP have an amount and the number of lives that are captured and must be considered for each adjustment. The Data Reference Numbers are 906 for SHIP lives and 907 for ASHIP lives. The Item Reference Numbers are 813 for SHIP amount and 814 for ASIHP amount.

The inception of this excise tax introduced a large volume of new and unfamiliar filers to the Form 720, Quarterly Federal Excise Tax Return. Coupled with the unique and complex nature of the PCORI tax, this generated confusion on the filing requirements and postings.

A common error is the PCORI tax posting to the incorrect tax period.

P.L. No. 117-58, Infrastructure Investment and Jobs Act, Title II, Section 80201, reestablished the collection of excise taxes related to taxable substances.

Abstract 17 is used for imported chemical substances.

Abstract 54 is used for chemicals (other than ODCs).

These taxes are effective July 1, 2022 and terminate December 31, 2031.

The North American Industry Classification System (NAICS) may be used to indicate if a taxpayer has correctly identified by abstract number the excise taxes reported for each TXPD. The NAICS Code is a six-digit number.

The code comes from the taxpayer's Form 1120, U.S. Corporation Income Tax Return, or Form 1065, U.S. Return of Partnership Income. Note that there may be multiple excise taxes reported. (See the Instructions for Form 1120, U.S. Corporation Income Tax Return, for a list of the codes.)

This listing is available using Control-D.

This is both a weekly and monthly report and includes the cycles (YYYYCC) for that week or month. Note that the cycle cutoff may not always match the AQETL.

The following steps should be taken when each report is received:

The listing is generated to include all MFT 03 abstract postings for $5,000 or more.

IRC 59A Environmental Taxes reported for MFTs 02 (Form 1120, U.S. Corporation Income Tax Return), 33 (Form 990-C, Farmer's Cooperative Association Income Tax Return) and 34 (Form 990–T, Exempt Organization Business Income Tax Return) are listed at the end of the report.

Use IDRS to complete the following:

Use the BMF Reject Register to:

SCCF (Service Center Control File) ANMF Data - confirm data reported correctly on ANMF Revenue Receipts Reports.

On-line Service Center Control File (SCCF) Transcripts

Return location or processing in the SPC

Number of Forms 720, Quarterly Federal Excise Tax Return, posted each quarter

IRS Tax News and other news items that affect reporting

A Form 720, Quarterly Federal Excise Tax Return, confirmation request may be in an email or in the form of questions on specific accounts on the AQETL. This request states the Form 720, Quarterly Federal Excise Tax Return, TXPDs that may have posting errors, have not posted timely, or have questionable posts.

The reports analyst must review this request to ensure that no posts requiring correction or confirmation are overlooked.

The purpose of this request is to:

The report analyst must review any request and take proper action such as:

The reports analyst must:

Retain a history sheet for your records to:

The reports listed in this section are used to certify amounts for the trust funds. The reports are for: Revenue Receipts (Collections), Net Tax Liabilities (returns and adjustments processed), Credits and Refunds (applicable to the Highway Trust Fund and the Airport and Airway Trust Fund related credits), and monitoring. The monitoring reports are Form 720, Quarterly Federal Excise Tax Return, transactions and tax module extractions.

Revenue receipts for excise taxes are reported by abstract number and amount monthly on the following reports:

Gas/oil and other credits claimed on Form 4136, Credit for Federal Tax Paid on Fuels, attached to income tax returns for Form 1040, U.S. Individual Income Tax Return; Form 1120, U.S. Corporation Income Tax Return; Form 1041, U.S. Income Tax Return for Estates and Trusts; 990–C, Farmer’s Cooperative Association Income Tax Return; and Form 990-T, Exempt Organization Business Income Tax Return, claims for refund are reported from each SPC quarterly on P–R–F GAS–01–04.

Refunds for all tax classes including the trust fund excise taxes are reported for each service center by manually combining the refund data generated from ECC, IDRS and manual refunds on the NTRR.

Analysis and monitoring reports are generated from ECC with selected data by EIN, abstract, tax period, MFT and amount on the Million-Dollar BMF Reports Records Listing (weekly and monthly), P/R/F 180–46–11 and 180–48–11.

The AQETL has been configured with new security requirements. These include password complexity requirements, as well as user login restrictions.

When a new user is hired, a Business Entitlements Access Request System (BEARS) request must be prepared to request permission to use the system.

The AQETL lists all Form 720, Quarterly Federal Excise Tax Return, abstract number postings by transaction code within TXPDs for each taxpayer account. The AQETL is programmed to allow review by abstract number or by Taxpayer Identification Number (TIN). The system lists the taxpayer data on the screen in TXPD sequence, transaction code, cycle posted and dollar amount under heading for each abstract present.

Errors are program generated when:

Accounts reporting material dollar amounts for any of the trust funds should be monitored for the Abstract Number Groups shown below for the applicable trust fund:

Non-trust fund taxes that require routine monitoring include:

When you have the original return, prepare the correction using Blocking Series 00, attach the correction information to the original return and return the original return to files.

Examples of source documents:

For corrections, use Blocking Series 15. Input an explanation in the remarks section of the reason for the adjustment. Send any documents to files.

When no correction is necessary: Keep these files for the current and prior FY until GAO has completed that FY audit. After the above period you can shred. Do not hold onto original returns, they must be sent back to files.

If a folder is already set up it will be kept at Cincinnati Campus Centralized Excise Operations.

The weekly and monthly Million-Dollar BMF Reports Records listing are reviewed on Control-D.

Disposal guidelines for manually prepared individual Form 720, Quarterly Federal Excise Tax Return, taxpayer monitoring records are as follows:

Credits for nontaxable use of various products may be taken on the Form 720, Quarterly Federal Excise Tax Return, Schedule C as CRN.

Negative TC 150 posts will appear on the following reports:

The taxpayer claims a credit by:

Some of the reasons for the over-reporting of taxes for prior quarters are:

Some of the reasons attributable to the taxpayer are:

Some of the reasons attributable to the IRS are:

The Form 720, Quarterly Federal Excise Tax Return, IRS Numbers, report is printed or loaded on Control-D. The purpose of this report is to provide the SPC RA with a count of the related trust funds and other excise taxes reported each quarter on the Form 720, Quarterly Federal Excise Tax Return.

The report is generated from the BMF Form 720, Quarterly Federal Excise Tax Return, master file at ECC. It includes abstract postings from Form 720, Quarterly Federal Excise Tax Return, transaction codes (TC) 150, 290, 300 and 370. It does not count abstract postings from TC 291, other 29X or 301, or other 30X TCs. There is one count made for each abstract present with a positive value. Abstracts present with a negative (reversal) or zero value are not counted. The report consists of counts for both valid and invalid abstract numbers as follows:

The report is non-cumulative and counts only those TCs posting during the processing quarter. There is no program timeliness check for the Form 720, Quarterly Federal Excise Tax Return, TXPD currently due. The counts for the abstract numbers represent abstract postings of each of the excise taxes from:

The report count extractions are based on the TC posting cycle YYYYCC. The cycles included in each report are printed in the header of the report. The report's inclusive cycles may not always match with the SC quarterly posting cycles.

The SPC RA should maintain a postings spreadsheet and update it quarterly. This postings spreadsheet should be set up as follows:

Compare the counts for each quarter with the counts for the prior quarter for consistency and reasonableness. Also compare each quarter with the same quarter one year ago to make seasonal comparisons. Look for possible trends or patterns in the counts being reported and posted.

Possible explanations for variations or changes in the counts reported are:

Reconcile or logically associate the count for each abstract with the dollar amount reported on the TREAS–92 report for each quarter. Verify when there are counts present for an abstract and dollars. The reverse is also true. The only exception will be the complete reversal of dollars from a prior quarter. However, the original abstract posts will not be reversed on the report. Allow for late posting returns, returns that cannot be posted, and any correction or adjustment TCs input.

Document abstract quarterly count trends. Monitor the counts closely to determine the causes of the increase or decrease for each quarter. Monitor those abstracts that tend to have seasonal patterns. Most of the abstracts dedicated to specific trust funds may follow the same trend or seasonal pattern. Trend changes may be the result of:

Monitor very closely the first few quarters for reporting a new excise tax, including:

Invalid IRS number posts should be posted to a separate recap sheet. Maintain it in a format similar to the invalid post spreadsheets. That is, record the two-digit invalid abstract number in the left column and the counts in the next columns headed up for each processing quarter ended MM–DD–YYYY.

Consult CFO headquarters for additional information.

Save these quarterly reports and the manually posted spreadsheets for future reference.

Make footnotes on the computer reports or spreadsheets to explain discrepancies or variances in the counts.

Flag any report and the posting spreadsheet for follow-up confirmation of potential changes expected on the next quarter's report. For example:

The reports analyst must be authorized to use IDRS to properly monitor, research, order returns, confirm transaction (TC) postings for TC 150, 29X, and 30X, and to make certain abstract corrections related to the Form 720, Quarterly Federal Excise Tax Return, TXPDs.

The reports analyst must have access to an IDRS terminal.

The reports analyst must be aware of the IRS security policies and procedures, including UNAX and Rules of Behavior.

The reports analyst or someone designated in the accounting function must be authorized to use at least the following IDRS command codes:

There may be other useful command codes but those listed above should be authorized in the reports analysts IDRS profile.

Use IDRS to:

IDRS will also be used to make or confirm adjustments to:

The IRS is required, either by public law, memoranda of understanding or direct requests from Treasury, to certify the taxes reported for the trust funds listed below. There are two general classifications and methods of preparing certifications for Treasury.

Collections are reported in formal certification letters each quarter for the following trust funds:

Refunds and credits are certified by formal certification letter each quarter for AATF only.

Net tax liabilities are reported by Treasury General Account Transfers quarterly for the Earmarked Funds, also known as Recreational Excise Taxes.

The ECC and SPC source reports and tax forms for reporting collections and net tax liabilities are:

The SPC source reports and the claim forms for claiming the refunds and credits are:

The figures for the trust fund certification detail amounts for collections are published in the:

The purpose of this section is to describe the structure of the Form 720, Quarterly Federal Excise Tax Return, Business Master File (BMF) account. An account is composed of one or more tax modules. Each tax module represents a tax liability quarter period. A quarterly tax period (TXPD) return is posted as a tax module on the BMF as Master File Tax code (MFT) 03 for Form 720, Quarterly Federal Excise Tax Return. Each TXPD tax module is composed of one original return, a TC 150, or a TC 370, Account Transfer-in. In addition, a TXPD may have ADP adjustments, a TC 29X, or a TC30X, audit adjustments.

Form 720, Quarterly Federal Excise Tax Return, account transactions:

Form 720, Quarterly Federal Excise Tax Return, account:

Form 720, Quarterly Federal Excise Tax Return, tax module:

Form 720, Quarterly Federal Excise Tax Return, valid transaction codes (TC):

Form 720, Quarterly Federal Excise Tax Return, original returns, TC 150:

Deposits, TC 610, 650 and 670 (subsequent payment).

Form 720, Quarterly Federal Excise Tax Return, filing and processing period:

Form 720, Quarterly Federal Excise Tax Return, liability tax period (TXPD):

Form 720, Quarterly Federal Excise Tax Return, timely filing due dates:

Form 720, Quarterly Federal Excise Tax Return, return filing and adjustment/claim filing instructions:

Processing quarter:

Federal Tax Deposit (FTD) or Electronic Federal Tax Payment System (EFTPS) requirements:

TXPDs in each Fiscal Year Ending (FYE) 9–30–YYYY reports:

This section lists the general posting rules applicable to Form 720, Quarterly Federal Excise Tax Return, accounts. The information presented is to be used as background information to have a better insight and understanding for reviewing Form 720, Quarterly Federal Excise Tax Return, transaction posts on the AQETL. This information will aid in the recognition of posting errors or questionable items that should be confirmed and then corrected if necessary. Information presented includes in part:

Delinquent return posts:

Duplicate returns, TC 150:

Duplicate transactions codes, TC 29X, 30X, and 370:

Return perfection:

Erroneous return posts:

Erroneous adjustment posts, TC 29X and 30X:

Final returns posts, TC 150:

Missing/unposted TXPDs:

Reasons for missing/unposted return TXPDs, TC 150:

Adjustment transactions, TC 29X:

Audit adjustments, TC 30X:

Form 720, Quarterly Federal Excise Tax Return, filers may claim credits for excise taxes paid for various reasons.

A credit claimed is related to the IRS number for which the tax was originally paid and reported, and not necessarily the tax due for which the credit is being used in lieu of a payment, by applying the credit as a payment/offset against tax due by the claimant filer.

Airline service type filer (ABS. 26–28, and 69):

Ozone Depleting Chemicals (ODC) (Abs 19):

Maximum number of abstracts allowed per return or transaction:

IRS number sequence posting on the tax module:

Zero tax liability returns:

IRC 59A, Environmental Taxes, are reported on Schedule J of Form 1120, U.S. Corporation Income Tax Return, MFT 02; Form 990–C, Farmer’s Cooperative Association Income Tax Return; MFT 33 and Form 990–T, Exempt Organization Business Income Tax Return, MFT 34.

ANMF data is reported on NMF Report of U.S. Internal Revenue Receipts, SCF-13–41.

Confirm all MFT 03 amounts for $5,000 or more to ensure the abstracts are correct.

If abstracting is incorrect, have data corrected for the next monthly cumulative report.

If the error is uncorrected at the end of a quarter or fiscal year, call CFO headquarters and report the dollar amounts and the abstract numbers being corrected.

Special emphasis should be placed on those excise taxes dedicated to the trust funds.

Review all TCs 370 listed on the AQETL.

Do not make any corrections unless:

All other TC 370 accounts have already been included in the T–92 Report.

Abstract 99, effective 1–1–92, for use by AIMS when its system will not accept the original abstract because of programming restrictions. Reasons original abstracts may not be accepted for input are:

Abstracts input by AIMS will be primarily on TCs 300 and 301; however, they could also be on TC 150 and 370.

AIMS abstract 99 TCs should be related primarily to TXPDs 199112 and prior.

AIMS TCs may have District Office number in DLN, instead of SC identity number.

Any abstract 99 present on a TC with a SC identity number in DLN may be an input error:

Abstract 99 posts should be reviewed and considered for correction in the same manner as abstract 80 unidentified postings.

To determine reclassification of abstract 99 posts:

If abstract 99 correction is unclear:

If the amount is under $50,000, and the issue is unclear, forgo research efforts. CFO headquarters will advise if any actions are required.

IDRS was reprogrammed to allow corrections using ADJ54 for all abstracts.

Special expedite procedures are to be used to assure returns of $1 million or more post in the current quarter and included in the correct certification.

Make a case on all returns of $1 million or more.

Million-dollar returns are identified by:

Pull Black Lung Trust Fund (Abstracts 36, 37, 38 and 39) returns that total $100,000 or more off the Weekly Million-Dollar Report on Control-D.

Then follow the Million-Dollar Procedures in section 3.17.41.8.52.

See IRM 3.17.63, Redesigned Revenue Accounting Control System, for a list of RRACS generated reports.

Reports are obtained using Control-D web for viewing and printing.