The need for a system to monitor the movement of motor fuel was made evident by well-publicized reports detailing extensive evasion of federal and state excise taxes on motor fuel during the 1980s and 1990s. Representatives of the motor fuel industry cooperated with state and federal governments to analyze and find a solution to the problem of motor fuel tax evasion. What emerged from that cooperation is a system termed the Excise Summary Terminal Activity Reporting System (ExSTARS), which is designed to attempt to prevent and detect the existence of illegal tax evasion schemes involving the federal and state excise taxes on motor fuel.

ExSTARS is a key component (subsystem) of the Excise Files Information Retrieval System (ExFIRS) project (for more information on the ExFIRS system and subsystems see IRM 4.24.26.2). The ExSTARS system processes data provided by Information Providers which is forwarded to the ExFIRS data warehouse for review by the IRS. The ExSTARS Gateway application provides access to the ExSTARS system for approved industry users, who have a need to upload data into the ExSTARS system.

ExSTARS is used to track the movement of fuel to and from approved terminals by electronically filed monthly information reports (Form 720-TO, Terminal Operator Report and Form 720-CS, Carrier Summary Report) reflecting fuel quantity and type as it moves through the bulk fuel distribution system. This information is used to analyze quarterly fuel volumes and is compared to the fuel tax information entered on Form 720, Quarterly Federal Excise Tax Return. All significant discrepancies are referred to the Excise Tax Examination for further analysis. The Excise Tax Examination will use the results of the analyses to identify entities that appear to be in noncompliance and to direct compliance resources to those entities.

ExSTARS is also used by approved State users, who have a need to download state reports prepared for them. Primarily, an approved State will use the data to compare a terminal's tax payments and filings to the gallons that are removed from the bulk transfer/terminal system and are then taxable. They also use it to track shipments into neighboring states and imports of product into their state.

Internal Revenue Code (IRC) 4101(d) authorizes the IRS to require information reporting from any person who is registered under IRC 4101 and from any other person who the IRS deems necessary to administer fuel tax rules.

Treas. Reg. 48.4101-2, Information Reporting, requires that each information report under IRC 4101(d) must be made in the form required by the Commissioner, made for a period of one calendar month, and filed by the last day of the first month following the month for which the report is made.

IRC 4101(d) flush language states that if a person is required to report under IRC 4101(d) and has 25 or more reportable transactions during a monthly reporting period, electronic reporting is required. Each receipt of liquid product by product code and each disbursement of liquid product by product code constitutes a separate transaction even if it is a single movement of fuel. For purposes of determining if there are more than 25 transactions per month, each line-item transaction listed on any information reporting schedule must be counted.

The Director, Exam Case Selection - Specialty, is responsible for oversight of Excise Case Selection.

The Program Manager, Excise Case Selection, is responsible for oversight of the JOC and WSD operations.

The JOC Manager is responsible for oversight of the JOC. Refer to IRM 4.24.18, Excise Case Selection, for the mission of the JOC.

The new IRM assigns Joint Operation Center (JOC) responsibilities under IRM 4.24.18.6, ExSTARS Administrative Support, paragraph (5) related to ExSTARS administrative processes to a JOC ExSTARS Coordinator. Additionally, it augments the Procedural Guidance Relating to Facility Control Number (FCN) found in IRM 4.24.17.1.2, by assigning this role to the JOC ExSTARS Coordinator. The JOC Coordinator is responsible for ExSTARS related administrative processes listed below:

The JOC ExSTARS Coordinator roles are assigned by the JOC Manager and are discussed in more detail throughout this IRM.

All information management systems have safeguard measures in place that address key components of Information Technology (IT) security requirements to restrict access to sensitive data.

See Exhibit 4.24.26-1, Terms, for a list of terms and definitions used in this IRM.

See Exhibit 4.24.26-2, Acronyms, for a list of acronyms and definitions used in this IRM.

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see Taxpayer Bill of Rights.

For general guidance, procedures, tax law, and regulations on a wide variety of excise issues, refer to Excise Tax Knowledge Base .

For information relating to identity theft, refer to IRM 25.23, Identity Protection and Victim Assistance.

For guidance concerning IRS privacy policy on the protection of tax information that includes personally identifiable information, sensitive but unclassified data and tax information, refer to IRM 10.5.1, Privacy Policy.

For unauthorized access requirements, refer to IRM 10.5.5, IRS Unauthorized Access or Inspection of Taxpayer Records (UNAX) Program Policy, Guidance and Requirements, and IRM 4.10.1.2.1.12, Unauthorized Access (UNAX).

For guidance on authentication requirements and to avoid unauthorized disclosure, refer to IRM 11.3.2.3.2, Requirements for Verbal or Electronic Requests.

For guidance on third party contacts, refer to IRM 4.11.57, Third Party Contacts.

The JOC ExSTARS Coordinator must follow authentication requirements found in IRM 11.3.2.3.2, Requirements for Verbal or Electronic Requests, during contact.

For general guidance concerning ExSTARS Administrative Support, see IRM 4.24.18.6, Excise Tax - ECS.

For an overview of Form 637, Application for Registration (For Certain Excise Tax Activities), refer to IRM 4.24.2, Form 637 Excise Tax Registrations.

For guidance on how to update the ExFIRS applications and ExSTARS Gateway, refer to the ExSTARS Application User Guide.

For general requirements, format, specifications, and procedures for the electronic filing of Internal Revenue Service (IRS) Form 720-TO, Terminal Operator Report and Form 720-CS, Carrier Summary Report, see Pub 3536, Motor Fuel Excise Tax EDI Guide.

The ExFIRS system is used by the JOC ExSTARS Coordinator in the performance of the JOC ExSTARS administrative related processes. See IRM 4.24.18.1.4 Program Management and Review, for additional information. ExFIRS is accessed via the Employee User Portal (EUP) which is located at https://eup.eps.irs.gov/eup_login/.

The JOC ExSTARS Coordinator utilizes the following six ExFIRS applications:

ExFIRS LOA application is used by the JOC ExSTARS Coordinator to enter the information submitted by an Information Provider on their LOA. In addition, using this application the JOC ExSTARS Coordinator can add, edit, delete, define administrative roles, and review reports. This application contains the following sub-applications:

ExFIRS TCN (Terminal Control Number) application is used to create Facility Control Numbers (FCN) including TCNs and Refinery Control Numbers (RCN). Using this application, the JOC ExSTARS Coordinator can add, delete, and modify FCNs and filer information. In addition, the JOC ExSTARS Coordinator can, assign administer roles, and generate reports. It contains the following sub-applications:

ExFIRS 720 PF application is used to perform queries of paper Form 720-TO and Form 720-CS. Information Providers send these forms to the Cincinnati Service Center where they are entered into ExFIRS by a Service Center Technician. The JOC ExSTARS Coordinator may use this application to query information using the Information Provider EIN or 637 registration number. The following function can also be performed using this application:

ExFIRS data admin application allows the JOC ExSTARS Coordinator to add, edit or delete taxpayer information as well as query taxpayer information by entering the EIN. In addition, the JOC ExSTARS Coordinator can perform administrative duties such as adding, editing, or deleting IRS Personnel and organizational access. Lookup tables allow the JOC ExSTARS Coordinator to search, add, edit, and delete Vessel Official Numbers. There is also access to a variety of reports under this application.

This application contains the following sub-application:

The vessel tables include the following info:

Once the review is complete, the FCO or FCA Group Manager will send the FCN Questionnaire back to the JOC ExSTARS Coordinator along with any supporting information. The JOC ExSTARS Coordinator will follow the directions in the ExSTARS Application User Guide to update the ExFIRS TCN application with the following information:

Once the new facility information is updated the FCN will be generated within the ExFIRS TCN application. The application will automatically put in the date the FCN was generated. The JOC ExSTARS Coordinator will follow the directions in the ExSTARS Application User Guide to verify the "effective date" is correct.

Once the FCN has been generated and the "effective date" verified, the JOC ExSTARS Coordinator will:

If upon review of an initial request for an FCN it is to be denied, then the JOC ExSTARS Coordinator will:

Once the review is complete, the FCO or FCA Group Manager will send the FCN Questionnaire back to the JOC ExSTARS Coordinator along with any supporting information. The JOC ExSTARS Coordinator makes the final determination for all FCN status change requests. Once a final determination is made the JOC ExSTARS Coordinator will:

The purpose of the LOA is to document the Information Providers who must file their reports electronically and to secure agreement to specific requirements of participation. In addition, it is the process used to convey the necessary information to facilitate electronic exchange of information. It will ensure the accuracy of the entity information by comparing the EDI entity data with the information in the IRS databases.

Information Providers must mail the LOA to the Service Center as directed by Pub 3536. The Service Center forwards the LOA to the JOC ExSTARS Coordinator.

Information providers may make an IRC 6103(c) consent election to disclose ExSTARS information with state agencies by submitting Form 8821, Tax Information Authorization, with the LOA. The information provider must attach the IRC 6103(c) consent language (see Pub 3536) and a list of states they are including in the election with Form 8821. This consent must be renewed every three years.

If the IRS approves an LOA, then a user account is created, and a one-time password is generated by the JOC ExSTARS Coordinator and sent to the user via mail. Refer to IRM 4.24.26.5.1, ExSTARS Letter of Application (LOA), for additional LOA procedures.

ExSTARS requires users to enter a username and password to access the system. After three consecutive invalid user access attempts, the ExSTARS subsystem locks the user’s account. The user must contact the ExSTARS EDI Help Desk to unlock their account.

The ExSTARS EDI Help Desk will contact the JOC ExSTARS Coordinator to unlock the user’s account. The JOC ExSTARS Coordinator will contact the user and provide a one-time reset password by following the directions in the ExSTARS Application User Guide.

Each new ExSTARS participant must complete ExSTARS EDI Qualification Testing before they are officially set-up to file Form 720-TO and Form 720-CS electronically through ExSTARS. A qualification process has been established that exchanges test and feedback files that are processed prior to submitting electronic production files. Refer to Pub 3536 for more information.

Information Providers who have fewer than 25 fuel movement transactions per month are not required to implement an EDI system for filing electronically through the ExSTARS subsystem. These filers can file their Form 720-TO or Form 720-CS via PS. Information Providers mail paper filed Form 720-TO or Form 720-CS to the Cincinnati Campus.

Campus personnel reviews paper filed Form 720-TO or Form 720-CS for completeness. If filing is complete, then the return is manually transcribed into ExSTARS by Campus.

Campus will e-mail the JOC ExSTARS Coordinator if the Form 720-TO or Form 720-CS filing is incomplete. The JOC ExSTARS Coordinator will:

Incomplete returns are manually transcribed into ExSTARS when all information is received by campus personnel.

Filers of ExSTARS Information Returns (Form 720-TO or Form 720-CS) must file Form 8809-EX, Request for Extension of Time to File an ExSTARS Information Return, to request an extension of time to file. An informal e-mail should not be accepted by the JOC ExSTARS Coordinator. The Form 8809-EX is filed with the Cincinnati Campus or the SBSE ExSTARS mailbox.

The JOC ExSTARS Coordinator will honor all initial a 30-day extension requests, except for those without a reason, if the request is received by the due date of the return.

An Information Provider may request longer extensions, but they are not automatic. The extension request must contain a detailed explanation as to why the additional time is needed. Valid extensions may include:

State Excise Tax Agencies (State Users) use the MOU process to review information collected by the IRS, via the filing of information returns (Forms 720-TO and 720-CS), to help enforce state motor fuel tax laws. For enrollment, State Users are granted access by signing a Memorandum of Understanding (MOU) with the IRS.

The informational detail provided to the State User is governed by the LOA process. An information provider can sign an IRC 6103(c) consent and provide a Form 8821, to allow a qualified State User to view their information. If such information is not included with a LOA, then any information provided will be governed by disclosure requirements.

The point of contact for a State User is the IRS federal/state liaisons.

The JOC ExSTARS Coordinator, the State User, and the IRS federal/state liaisons all retain copies of the original signed MOU.