The Internal Revenue Code (IRC) requires each person who engages in certain activities subject to federal excise tax (FET) to be registered by the IRS as a taxpayer who engages in these activities. The taxpayer must register with the IRS before undertaking the activity. In other situations, a person must register with the IRS as a taxpayer who conducts certain activities to receive an excise tax benefit that may come with such activity, such as, buying or selling an article tax-free or filing a claim for refund or credit. For specified activities, the taxpayer must use Form 637 to apply for registration under:

Form 637 includes a listing of activities for which registration is required or allowed. Refer to the tables found in IRM 4.24.2.3, Applications Under IRC 4101, and IRM 4.24.2.4, Applications Other Than Under IRC 4101, that list all applicable activity letters.

Letter 3689, Approval of Excise Tax Registration, is issued when an application is approved. A copy of the Form 637 application is not considered proof of registration. Letter 3689 should be retained as proof of registration.

Letter 3689 does not constitute a determination letter. For example, an approval of a Form 637 Registration with activity letters AB, NB, or SA does not mean all future product produced unequivocally qualifies for the biodiesel/renewable diesel mixture credit or sustainable aviation fuel credit. In addition, an approval of a Form 637 Registration with activity letters AL or AM does not mean all future product produced unequivocally qualifies for the alternative fuel/alternative fuel mixture credit.

If an application for registration is denied or an approved registration is revoked, then the applicant or registrant will be notified in writing and the reason for the denial or revocation will be provided.

An approved registration remains valid until revoked. Registration status can be found at Confirm Online Form 637 Registration Status.

All Form 637 Registration numbers issued after February 1, 2004, are comprised of 10 digits. For registration numbers issued prior to the preceding date:

Form 637 Registrations are processed under the following authorities:

Notice 2016-15, Treatment of Kerosene for Use in Aviation, provides guidance regarding the criteria for designation of a terminal located within a secure area of an airport as a SAT for purposes of IRC 4081 and IRC 4082.

Delegation Order SBSE 1-23-7 (formerly SBSE DO 4.36, Rev. 3), Approval, Denial, Suspension or Revocation of Form 637, Application for Registration (for Certain Excise Tax Activities), delegates the authorities for approving, denying, revoking, and/or suspending Form 637 Registrations.

Delegation Order 4-6 (Rev. 1), Taxable Fuel Bond, delegates the authority to make the final determination as to the amount of bond required to be given by an applicant or existing registrant, to satisfy certain registration requirements under IRC 4101 with respect to the tax imposed by IRC 4041(a)(1) or IRC 4081. This delegation order also delegates the authority to require the posting of a bond to satisfy certain registration requirements under IRC 4101 for Form 637 Registration and to set the value of such bond.

Delegation Order SBSE 1-23-47, Approval or Denial / Revocation of Secure Airport Terminal (SAT) Designations, delegates the authorities for approving, denying, and revoking SAT designations.

This section is tailored for the operational roles, responsibilities, and procedures for Form 637 Registrations and SATs. Refer to IRM 4.24.2 for a general overview of Form 637 Registrations, including applications under IRC 4101, IRC 4222, IRC 4662, and IRC 4682, as well as for general guidance. Refer to IRM 4.24.24, Form 637 Registration Files: Administrative Procedures for Initial Applications and Case Reviews, for guidance regarding Form 637 initial applications and case reviews.

Director, Examination - Specialty Policy is responsible for the procedures and policies addressed in this section.

Program Manager, Excise Tax Policy is responsible for ensuring the procedures are accurate and updated regularly as needed.

The Chief, Estate & Gift/Excise Tax Exam is responsible for ensuring the procedures within this section are adhered to by employees in Excise Tax Examination.

Form 637 Registration case work and SAT designations are processed by the following areas:

Program Reports - Information regarding the reporting of program objectives are included on, but not limited to the following:

Program Effectiveness - Excise Embedded Quality Performance Reports measure whether quality attributes are applied uniformly and consistently.

Annual Review - Program Manager, Excise Tax Policy, is responsible for reviewing the information in this section annually to ensure accuracy and promote consistent tax administration.

Below are the acronyms and their definitions used throughout this section.

Refer to IRM 4.24.23.1.2 for the most significant statutes and regulations affecting Form 637 Registrations.

Refer to Notice 2016-15 for guidance regarding the criteria for designation of a terminal located within a secure area of an airport as a SAT for purposes of IRC 4081 and IRC 4082.

Refer to IRM 4.24.1, Introduction to Excise Taxes, for general framework describing basic examiner responsibilities, excise IRC sections, excise IRM sections, excise tax abstracts, and Excise Tax Program returns and claims.

For further guidance and procedures on a wide variety of excise issues, refer to the Excise Tax Knowledge Base Homepage accessed via the Virtual Library on IRS Source - Home.

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. For additional information, refer to IRC 7803(a)(3) and Taxpayer Bill of Rights.

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

The registration group manager is responsible for:

The registration group LT is responsible for maintaining the IMS case files in their assigned territory. However, due to workflow of applications and registrations, the LT may also assist other territories.

The LT is responsible for:

The TE in the registration group is responsible for:

Based on the needs of the Excise Tax Program, various activity letters will be worked as correspondence compliance reviews by the registration group.

An Annual Form 637 Registration Workplan will be distributed to the registration group before the beginning of the fiscal year. Correspondence compliance reviews will be started on a pro-rata basis based on the Annual Form 637 Registration Workplan to ensure timely completion of the reviews by fiscal year end.

Approved registrants under the Large Corporate Compliance Program will not be selected for correspondence compliance reviews and will be referred to the excise groups.

Correspondence compliance reviews that cannot be resolved by the registration group will be sent to the appropriate excise group for completion.

Refer to IRM 4.24.24.4.3, Status 20 Compliance Check - Overview Initial Application and Sample Reviews Conducted by Form 637 Registration Group TE, for additional information.

The group manager is responsible for:

The group manager is also responsible for ensuring that:

If the initial application contains a combination of recommendations, then the group manager will sign and issue all appropriate letters.

If the group manager elects to use an electronic signature, then a graphic digital signature must be used.

The examiner must utilize IMS and the appropriate Form 637 mandatory administrative forms, activity letter job aids and Form 637 Registration letters currently found in the Notebook Job Aid. Refer to IRM 4.24.23.11 for more detailed guidance.

Form 637 reviews completed by the examiner must include a complete analysis of the applicant's or registrant’s business operations. Refer to Exhibit 4.24.23-1 for more information regarding business operations and transactions flow. At a minimum, the review must consist of:

All IMS case files must include documentation for the appropriate registration tests for each activity letter for which the applicant applied and/or for which the registrant is registered. Refer to IRM 4.24.2.3.1, Registration Tests for IRC 4101 Activities, and/or IRM 4.24.2.4.1, Registration Tests for Activities Other Than Under IRC 4101, for more detailed guidance about registration tests.

The examiner must also review transcripts, other IDRS research, Accurint, Currency and Banking Retrieval System (WebCBRS) research and any other internal IRS documents to determine compliance with registration tests (e.g., the satisfactory tax history test).

Prior to recommending a registration be approved or continued, the examiner must resolve all deficiencies and/or delinquencies. This includes items notated on the 637 Recommendation Sheet prepared by the registration group.

The examiner must explain to the new registrant:

The examiner must explain to the new registrant the filing, payment, and deposit requirements for the following, when applicable:

The examiner must explain to the new applicant or registrant a compliance review may be conducted in the future to verify compliance with the registration tests. A compliance review includes, but is not limited to:

The examiner must direct the applicant or registrant to the IRS website for obtaining a copy of Publication 510 and discuss the applicable section(s), including any excise tax law updates that apply. The examiner shall fully answer any relevant questions posed by the applicant or registrant.

If an examiner conducts an examination on a current Form 637 registrant, then the Form 637 Registration must be given due consideration, regardless of when the last compliance review was conducted.

The examiner must select the appropriate box on the A105, Administrative Check Sheet, and comment on the actions taken at the conclusion of the examination to verify the registration status.

If the examination results in a no-change or a refund, then the examiner must, at a minimum, conduct a limited scope discretionary review. The examiner must ensure the registration status should be "Continued" if all registration criteria is met. If a limited scope discretionary review is conducted, then the examiner must follow the procedures in (6) thru (11) below.

If the examination results in a change, then the examiner must conduct a discretionary review. Refer to IRM 4.24.23.7.5 for detailed guidance on compliance review procedures. The examiner must discuss initiating the discretionary review with the group manager, secure approval before proceeding and document all actions taken in the Examining Officer’s Activity Record.

If a discretionary review is approved, then the group manager will establish ERCS controls and request the LT assign the IMS case file to the group. If a discretionary review is not approved, then a limited scope discretionary review will be conducted.

If a limited scope discretionary review is conducted, then the examiner must document the A105 under the "Consideration of Form 637 Registration Status" section and summarize actions taken to ensure a "Continued" 637 registration status.

If the registration should be continued, then the examiner must prepare Letter 3696, Form 637 Compliance Review Summary, for issuance by the group manager upon case closure. Examiner contact information should be included. Include the letter in the examination IMS case file and paper file.

If the registration should be revoked, then the procedures in IRM 4.24.23.9 apply.

If the registrant has a registration number that was issued prior to February 1, 2004, then the procedures in IRM 4.24.23.7.4(10)(a) apply.

Upon completion, review, and acceptance of the examination case file by the group manager, they will sign, date and mail Letter 3696. In addition, the group manager will forward, via secure e-mail, to the LT the following documents so that the case file can be updated:

The LT must:

Form 637 compliance reviews, including limited scope discretionary reviews documented on the A105, are subject to EQ reviews.

The examiner must review an initial application for registration, make an on-site visit, if necessary, and then recommend approval or denial of the application. Mandatory Administrative Forms must be completed to support the recommendation and uploaded into the IMS case file.

Initial contacts with an applicant must be made by mail using the appropriate initial contact letter. The examiner must not make initial contact by telephone.

Examiners must use Letter 5708 to notify the applicant of their initial application review. Refer to IRM 4.24.23.3 for additional information.

Following the initial telephone conversation with the applicant and scheduling the appointment, the examiner must prepare and issue Letter 3686, Appointment Scheduled - Form 637 Reviews, to confirm the initial appointment. A copy of the signed Letter 3686 must be uploaded into the IMS case file.

If the applicant fails to respond to the initial contact letter after 14 calendar days, and it was not returned as "undeliverable," then the examiner must determine why the applicant is not responding. Follow-up attempts must be made to contact the applicant, including telephone inquiries. Refer to IRM 4.10.2.8.3, No Response/No Show Procedures, for additional information.

If follow-up attempts are unsuccessful and the examiner exhausted all available avenues to locate the applicant to conduct the review, e.g., Accurint, IDRS, WebCBRS and telephone directories, then the examiner should recommend denying the application. Refer to IRM 4.24.23.9 for additional information.

If the initial contact letter is returned "undeliverable," then the examiner must take steps to determine if a more current address or contact information can be obtained, as well as document the actions taken in the IMS case file. Refer to IRM 4.10.2.8.4, Undeliverable Initial Contact Letters, for additional information about obtaining a current address. If the applicant cannot be located, then the examiner must scan and upload a copy of the returned envelope into the IMS case file, complete Form 13499-C, 637 Recommendation, and recommend denying the registration. Refer to IRM 4.24.23.9 for additional information.

If an applicant meets all the applicable registration tests, then the examiner and group manager must follow the procedures in IRM 4.24.23.8, Procedures Relating to Approvals and Continuations of Registrations.

If an applicant does not meet all the applicable registration tests, then the examiner and group manager must follow the procedures in IRM 4.24.23.9, Procedures Relating to Denials or Revocations of Registrations.

A national registration number with approved activity letter(s) will be issued to each registrant. Multiple registration numbers will not be issued if:

If a registrant later qualifies for registration for activities not covered by the current approved registration number, then a Form 637 application must be submitted with the additional activity letter(s) for approval. An updated Letter 3689 must be issued to reflect the additional activity letter(s).

If a determination is made that an applicant did not apply for the correct activity letter, but qualifies for a different activity letter listed on the Form 637 application, then the examiner must:

Excise Tax Examination, is responsible for ensuring the registrant is:

Terms and conditions for registrants may be found at:

The group manager is responsible for ensuring all sample compliance reviews are completed by fiscal year end.

The territory manager and/or group manager may request a discretionary review on a Form 637 registrant derived from a lead, if facts and circumstances warrant.

If a registrant is selected for a discretionary review, then the group manager will request the LT update the IMS case file to the excise group. The excise group must establish ERCS controls for all discretionary reviews.

A compliance review may require a field visit.

All initial contacts with a registrant on a sample or discretionary review must be made by mail. Refer to IRM 4.24.23.3 for additional information.

Following the initial telephone conversation with the registrant and scheduling of the appointment, the examiner must prepare and issue Letter 3686 to confirm the initial appointment.

If the registrant fails to respond to the initial contact letter after 14 calendar days and it is not returned as "undeliverable," then the examiner must follow the procedures in IRM 4.24.23.7.4(5) and (6).

If the initial contact letter is returned "undeliverable" and the address in IMS matches the address on IDRS, then no further actions will be taken to locate the registrant. Refer to IRM 4.24.2.7, Changes in the Information Submitted in Connection with Application for Registration, and Publication 5039 for additional information. The examiner must scan and upload a copy of the returned envelope into the IMS case file and recommend revoking the registration.

The IMS case file will be documented sufficiently to establish what was done during the review. Refer to IRM 4.24.23.11 for information on mandatory workpapers.

The examiner must review the IMS case file, perform Accurint, IDRS and WebCBRS research, as well as review any other relevant internal documents. Exemption certificates, if applicable, must be inspected to ensure the registrant is compliant with the registration requirements.

At the conclusion of the review, the examiner must make a recommendation to approve, continue, deny, or revoke the registration.

At the conclusion of the sample or discretionary review, the examiner must prepare Letter 3696, Form 637 Compliance Review Summary, using their contact information and indicate if problems were identified.

If no problems were identified, then the examiner must make a recommendation to continue the registration and close the IMS case file to the group manager. Refer to IRM 4.24.23.8 for additional information on continuing a registration.

If problems were identified and the recommendation is not to revoke the registration, then the examiner must clearly and concisely document deficiencies in the body of Letter 3696. The description should be specific to the registrant's situation. Examples of deficiency statements include, but are not limited to, the following:

The examiner must include a follow-up date on Letter 3696 by which time the registrant must correct the stated deficiencies.

The examiner must upload Letter 3696 and all mandatory workpapers into the IMS case file, recommend continuation of the registration and close the IMS case file to the group manager.

On the follow-up date indicated on Letter 3696, the examiner is to request the IMS case file as a discretionary review from the group manager.

If after the follow-up review the registrant has corrected the deficiencies, then a new Letter 3696 must be prepared, and the registration continued. Refer to IRM 4.24.23.8 for information on continuing a registration.

If after the follow-up review the registrant has not corrected the deficiencies, then the examiner must discuss the revocation with their group manager and take the appropriate actions. Refer to IRM 4.24.23.9 for information on revoking a registration.

IMS Notebook files contain general language for new applicants and follow up reviews for registrants to assist with completing Form 4564, Information Document Request.

The purpose of the A605 is to provide a set of administrative guidelines for tasks that may arise during the compliance review. It is similar in nature to the A105 employed for excise examinations.

Form 2848 or Form 8821 that reflects Form 637 representation only cannot be forwarded to the CAF unit as there is no master file for Form 637. Form 2848 or Form 8821 must be scanned and uploaded into the IMS case file. However, if Form 2848 or Form 8821 representation contains tax returns, (e.g., a Form 720, Form 1120, etc.), then it must be forwarded to the CAF unit for processing. For additional information regarding a power of attorney, refer to IRM 4.11.55, Power of Attorney Rights and Responsibilities.

The A610 is a guide for planning the Form 637 compliance review. It is similar in nature to the A110 employed for excise examinations.

The A615 provides guidance for conducting the initial contact with the applicant or registrant. It is similar in nature to the A120 employed for excise examinations.

Interviews will be documented using the A625. It is similar in nature to the A125 employed for excise examinations.

Completion of A625 does not constitute a comprehensive interview. Additional questions should be tailored to the activity letter, which the applicant is seeking, or the registrant is registered.

The purpose of the B700 is to document the tax history of the applicant or registrant, owners, officers, and any related entities. It is similar in nature to the B200-1 and B200-2 employed for excise examinations.

Examiners must consider and evaluate the applicant’s or registrant’s (and any related person or persons) past payment history for all tax liabilities with special attention to past treatment of excise and employment tax liabilities.

Approval of an application or continuation of a registration must not be allowed if there are outstanding federal tax liabilities, which are unaddressed.

Compliance issues including, but not limited to the CP 241 notice and items noted on the 637 Recommendation Sheet, completed by the TE in the registration group should be addressed, if applicable. Refer to IRM 4.24.24.5.2, CP 241, Notice - 637 Registrant, Procedures, for additional information.

The C800 is only required for applicants or registrants that are subject to the adequate security test and acceptable risk test.

The C800 documents a financial analysis of the applicant or registrant. A financial analysis is a picture of the business in dollars and cents. It shows levels of risk, measures business performance and enables the examiner to make informed decisions about the health of the business.

Examiners may select financial ratios they feel best demonstrate financial health of the business and document the methods employed. Refer to Exhibit 4.24.23-2 for Financial Analysis Techniques.

Examiners must consider an analysis of internal controls when completing a financial analysis. Refer to IRM 4.24.23.11.8 for additional information on Internal Controls.

If the applicant or registrant is experiencing financial difficulty, then the examiner should protect the government’s interests by ensuring the applicant or registrant is not using FET deposits to pay other liabilities or is filing excise tax claims to increase cash flow.

In certain instances, a financial analysis should be utilized in determining if taxpayer will be required to post a bond to meet the adequate security test. For additional information on bonding, refer to IRM 4.24.2.5, Bonding.

The C805 is only required for applicants or registrants that are subject to the adequate security test and acceptable risk test.

The C805 documents the analysis of internal controls and the business operations of the applicant or registrant. It is similar in nature to the C305 employed for excise examinations.

Internal controls must be analyzed and documented to demonstrate:

The examiner must verify the applicant or registrant has adequate resources and internal controls to ensure the collection and payment of tax. This can be documented by:

The D900 contains action items to consider at the time initial contact occurs. It is similar in nature to the D400 employed for excise examinations. The D900 documents that the examiner:

Form 13499-C and Form 13499-E are summary sheets that document all the following:

CSTO is comprised of the Excise Operations Unit, the Classification Team, and the Audit Information Management System/Examination Returns Control System (AIMS/ERCS) Team, which are independent of one another.

Upon receipt of a SAT Designation request, the Excise Operations Unit date-stamps the SAT Designation request and expeditiously routes it to the Classification Team.

Upon receipt, the Classification Team ensures the request is complete. If not complete, then the requestor should be contacted for any missing information. Required information includes the following:

The Classification Team conducts research to determine if an open compliance activity is in process for the designated requestor. Research should include both AIMS and ERCS review (i.e., MFT - B0, PH, P9, etc.).

If an open compliance activity applies to the designated requestor, then the Classification Team scans the original request letter and forwards it to the appropriate excise group.

If an open compliance activity does not apply to the designated requestor, then the Classification Team must prepare a classification check sheet, which includes the following:

The scanned original request and completed check sheet must be forwarded to the AIMS/ERCS Team.

Upon receipt, the AIMS/ERCS Team establishes the request on ERCS using the information from the classification check sheet.

The AIMS/ERCS Team assigns the request to the excise group where the terminal is geographically located regardless of the area in which the entity is registered.

The AIMS/ERCS Team forwards the excise group assignment information and the SAT Designation request letter to the registration group manager via secure e-mail.

If a SAT Designation requestor provides the Excise Operations Unit new information about the changes in business operations, which may include but is not limited to, changes in refueling equipment, security measures, owners/operators or any other change to the SAT Designation criteria specified in Notice 2016-15, Section 4 then that updated information will be forwarded to the registration group manager via secure e-mail for follow-up actions.

If a SAT Designation denial or revocation is contested, then the Chief, Estate & Gift/Excise Tax Exam is the only person authorized to address and propose a remedy. For this reason, if the Excise Operations Unit receives a written appeal, then they must forward it to the registration group manager for consideration via secure e-mail and have no contact with the requestor or designee.

Upon receipt of the SAT Designation request letter and excise group assignment information from the AIMS/ERCS Team, the registration group manager will assign the IMS case file to the Lead Technician (LT) responsible for the territory where the terminal requesting SAT Designation is located.

The LT must prepare and issue Letter 3681-A, Secure Airport Terminal (SAT) Notification, to the SAT Designation requestor and provide their contact information.

The LT must upload Letter 3681-A and SAT Designation request letter in IMS and assign the related Form 637 case to the group indicated by the AIMS/ERCS Team.

The registration group has no further duties in processing the designation request unless a contested denial or revocation occurs.

If a SAT Designation requestor objects in writing to a denial or revocation, then it is contested. In this situation, a written appeal must be provided by the SAT Designation requestor to the registration group manager within 10 calendar days from the date Letter 3685-A, Denial of Secure Airport Terminal (SAT) Designation, or Letter 3691-A, Revocation of Secure Airport Terminal (SAT) Designation, was issued.

If a SAT Designation requestor or designee contests a denial or revocation, then the designated LT documents this on the case activity record and uploads the written appeal into the IMS case file.

The LT forwards the IMS case file to the registration group manager prior to a scheduled meeting between the Chief, Estate & Gift/Excise Tax Exam, and the registration group manager.

If the Chief, Estate & Gift/Excise Tax Exam determines a SAT Designation should be granted or continued, then the IMS case file will be updated to the designated LT who will issue Letter 3689-A, Approval of Secure Airport Terminal (SAT) Designation, to the requestor or designee. The LT must also contact the IRS ExSTARS Coordinator to update the designation.

If the Chief, Estate & Gift/Excise Tax Exam concurs a SAT Designation should be denied or revoked, then they sign Letter 3684-A, Final Denial of Appeal for Secure Airport Terminal (SAT) Designation, or Letter 3690-A, Final Denial of Appeal for Secure Airport Terminal (SAT) Designation Revocation.

After the Chief, Estate & Gift/Excise Tax Exam signs the applicable denial or revocation letter, it will be forwarded to the registration group manager for issuance to the SAT Designation requestor and uploaded into the IMS case file. Once the appropriate letter is issued, the Form 637 group manager or designee will contact the IRS ExSTARS Coordinator to update the designation.

The SAT Designation requestor has no administrative recourse if they disagree with a denial or revocation following appeal. Currently, the SAT Designation requestor may independently submit a new request for a SAT Designation, which must comply with the procedures described in Notice 2016-15, Section 5.01.

A completed compliance review of the Form 637 activity letter S registration is required to make a SAT Designation determination.

Refer to IRM 4.24.23.7.1 for detailed guidance about the group manager’s responsibilities. Additionally, the group manager must:

An examiner recommends approving, continuing, denying, or revoking SAT Designations. An examiner assigned a Form 637 activity letter S review that includes a SAT Designation must address whether it should be continued or revoked. To confirm a terminal is designated as a SAT, refer to Terminal Control Number (TCN) Terminal Locations Directory.

If an initial SAT Designation requestor satisfies the criteria for approval, then the examiner must:

If the terminal operator continues to meet the criteria for a SAT Designation, then the examiner must:

If an initial SAT Designation requestor fails to satisfy the requirements for a SAT Designation, then the examiner must obtain written concurrence from the SAT Designation requestor. If this happens, then an e-mail from the SAT Designation requestor will satisfy the denial. Upon receipt of the concurrence, the examiner must:

If an initial SAT Designation requestor fails to satisfy the requirements for a SAT Designation and does not concur with the denial, then the examiner must:

If the terminal operator no longer satisfies the requirements for a SAT Designation, then the examiner may obtain written concurrence from the SAT Designation requestor. If this happens, then an e-mail from the requestor will satisfy the revocation.

Upon receipt of the concurrence, the examiner must:

If the designee does not concur with the revocation, then the examiner must:

Once all the steps and procedures described above have been completed, the examiner must forward the appropriate document (i.e., approval or denial letter) to the IRS ExSTARS Coordinator.

To finalize the process for approving, continuing, denying, or revoking a SAT Designation, the IRS ExSTARS Coordinator must: