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 an AB, NB, or SA registration 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 an AL or AM registration 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, 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:

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 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.

This section is tailored 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 4.24.23, Operational Procedures and Responsibilities for Form 637 Excise Tax Registrations and Secure Airport Terminals (SATs), for guidance regarding operational procedures and responsibilities for Form 637 Registrations and SATs. 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 is processed by the following areas:

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

Program Effectiveness - Program effectiveness may be measured by the Exam Quality Review Staff, located in Field & Specialty Exam Quality (FSEQ). FSEQ supports the SB/SE Quality Improvement Program utilizing National Quality Review System (NQRS) to conduct case reviews from statistically valid samples of examination case work. National, area and territory trend analysis on the quality attributes are used to establish baselines to assess program performance, identify opportunities to improve work processes, analyze causes of failure, assess the feasibility of possible solutions and measure the success of quality improvement efforts.

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

Below are definitions for terms frequently used throughout this section:

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

Refer to IRM 4.24.1, Introduction to Excise Taxes, for general information about basic examiner responsibilities, Excise IRM Sections, primary excise returns and excise claim forms and materials about excise tax abstracts and issues.

For tax law and regulations regarding Form 637 Registrations, refer to the following:

Form 637 Registration status can be located at Confirm On-line Form 637 Registration Status.

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

The Taxpayer Bill of Rights 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), or to the Taxpayer Bill of Rights.

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

Registration tests are defined in Treas. Reg. 48.4101-1(f). Different activity letters have different tests; some require all three tests are satisfied. The tests are:

Activity Test - Under Treas. Reg. 48.4101-1(f)(2), an applicant meets the activity test only if it is determined that it is, in the course of its trade or business, regularly engaged in the activity applied for or likely to be regularly engaged within a reasonable period of time after being registered. In determining whether an applicant is likely to be engaged in a listed activity, the following factors should be considered:

Acceptable Risk Test - Under Treas. Reg. 48.4101-1(f)(3), an applicant meets the acceptable risk test only if it is determined that neither the applicant nor a related person has been penalized for a wrongful act.

Even though the applicant or a related person has been penalized for a wrongful act as defined under Treas. Reg. 48.4101-1(b)(4), the Chief, Estate & Gift/Excise Tax Exam may determine, after review of evidence offered by the applicant, that the registration does not create a significant risk of nonpayment or late payment of the tax imposed by IRC 4041(a)(1) and IRC 4081.

In determining whether an applicant creates a significant risk of nonpayment or late payment of tax, the following factors should be considered:

Related person - Under Treas. Reg. 48.4101-1(b)(5), a related person, which includes officers, owners, and members, is a person that meets any of the following conditions:

Penalized by a Wrongful Act - Treas. Reg. 48.4101-1(b)(4) provides a person has been penalized for a wrongful act if any of the following conditions are true:

Adequate Security Test - Under Treas. Reg. 48.4101-1(f)(4), an applicant meets the adequate security test only if it is determined the applicant has both adequate financial resources and a satisfactory tax history or the applicant posts a bond under Treas. Reg 4041-1(j).

Adequate Financial Resources - An applicant has adequate financial resources only if it is determined by the Chief, Estate & Gift/Excise Tax Exam the applicant is financially capable of paying:

Satisfactory Tax History - Under Treas. Reg. 48.4101-1(f)(4)(iii) an applicant has a satisfactory tax history only if the Chief, Estate & Gift/Excise Tax Exam is satisfied with the filing, deposit and payment history for all federal taxes of the applicant and any related person. Complete transcripts or other equivalent research will be used for this purpose.

An applicant will be registered for activities K, M or S only if the examiner determines that the applicant meets all three registration tests found in Treas. Reg. 48.4101-1(f).

An applicant will be registered for activities as an X, Y, AB, AF, AL, AM, BC, CC, NB, QR, SA, SB, UA, UB, UP, or UV only if the examiner determines that the applicant meets the Activity Test and the applicant and all related persons have a Satisfactory Tax History, including claim history.

In addition to the registration tests, AB agri-biodiesel and NB biodiesel applicants must meet the requirements of IRC 40A(d)(1) that define biodiesel as the monoalkyl esters of long chain fatty acids derived from plant or animal matter, which must meet:

In addition to the registration tests, NB renewable diesel applicants must adhere to the requirements of IRC 40A(f)(3) that define renewable diesel as liquid fuel derived from biomass, which must meet:

NB registrants that produce or import renewable diesel are also required to register under activity letter S to identify them as a refiner or enterer of a taxable fuel.

In addition to the registration tests, SA sustainable aviation fuel applicants must adhere to the requirements of IRC 40B(d) that define sustainable aviation fuel as liquid fuel, the portion of which is not kerosene, which:

SA registrants that blend SAF synthetic blending components and ASTM D1655 kerosene used to produce SAF qualified mixtures are also required to register under Activity Letter S if the blending occurs within the bulk transfer/terminal system (that is, above the rack) or under Activity Letter M if the blending occurs outside the bulk transfer/terminal system (that is, below the rack).

SA registrants that produce SAF co-processed qualified mixtures and co-processed liquid fuel are also required to register under Activity Letter S to identify them as a refiner of a taxable fuel.

In addition to the registration tests, the examiner must obtain samples to determine that agri-biodiesel, biodiesel, renewable diesel, or sustainable aviation fuel producer applicants and registrants (AB, NB, or SA applicants and registrants) are adhering to the ASTM requirements listed above.

Samples of agri-biodiesel, biodiesel, renewable diesel, and sustainable aviation fuel produced or imported are required for testing for ASTM standards. FCOs or FCAs, if available, should obtain the samples from the producer/importer applicant during the initial registration process and in follow-up compliance reviews. There may be instances when an FCO/FCA is not readily available. For these situations, an examiner may allow an applicant, registrant, or designated proxy to collect and ship samples to the Excise Forensics Laboratory (EFL). The collection and shipping of samples without an FCO/FCA may occur under the following circumstances and procedures:

Approval or continuation of registration for AB, NB, or SA will be granted only if the results from the lab test for the agri-biodiesel, biodiesel, renewable diesel, and/or sustainable aviation fuel samples submitted by the applicant or registrant meet the IRC requirements.

The Y activity letter is necessary for an aircraft operator to self-assess excise tax on Abstract 077.

Use of fuel in foreign trade. A buyer of aviation-grade kerosene fuel for use in foreign trade does not need to be registered to buy aviation fuel tax-free for that purpose. Refer to Section 4(f) of Notice 2005-04.

An aircraft operator/ultimate purchaser does not need to be a Y registrant for a registered ultimate vendor (UA registrant) to make a claim for kerosene sold for use in commercial aviation. The aircraft operator/ultimate purchaser can provide model Waiver L to an UA registrant without having a Y registration.

The requirement that each commercial aircraft operator have a Y registration was removed by Notice 2005-80 Section 3(d).

Specific rule for qualified fuel sales in Alaska. Treas. Reg. 48.4082-5(b) provides that the Chief, Estate & Gift/Excise Tax Exam will register a person as a Qualified Retailer (QR) only if both of the following requirements are met:

It is required that a field visit be conducted at the principal business location and/or production facility of the applicant for activities K, M, S, X, AB, AF, NB, SA, and SB.

A field visit by an examiner may be warranted to the principal business location of the applicant for activities AL, AM, BC, CC, UA, UB, UP, UV, and Y.

A field visit by an examiner is not required for activity QR.

If the entity is an Indian Tribal Government, refer to IRM 4.24.6.2.14, Excise Examinations of Indian Tribal Government (ITG) Cases, for procedures to follow before visiting an applicant.

The Chief, Estate & Gift/Excise Tax Exam must revoke the registration for activities above, if it is determined at any time the registrant:

The examiner must recommend revoking the registration of any person registered for activities AB and/or NB, if it is determined the results of samples obtained during a compliance review do not meet ASTM standards.

The examiner must recommend revoking the registration of any person registered for activity SA, if it is determined the results of samples obtained during a compliance review do not meet ASTM standards and/or do not meet the requirements of IRC 40B(f)(2).

Applicants will be registered under IRC 4222 and IRC 4682, if they meet the following tests:

The activity test for activities A, Q, or V will be met only if it is determined the applicant or registrant in the course of its trade or business, regularly engaged in making certain tax-free sales described under IRC 4221 for activities A or Q, or IRC 4682(d) for activity V, or is likely to be regularly engaged in making certain tax-free sales because of such factors as the applicant’s business experience, financial standing or trade connections.

The activity test for activities B, C, D, E, F, or I will be met only if it is determined the applicant in the course of its trade or business, regularly engaged in purchasing taxable articles under Chapter 32, Manufacturer’s Excise Taxes, other than under IRC 4121, or IRC 4081, or under Subchapter C of Chapter 31 (IRC 4051 - 4053) or is likely to be regularly engaged in these activities because of such factors as the applicant’s business experience, financial standing or trade connections.

The activity test for activity G will be met only if it is determined the applicant, in the course of its trade or business, makes inventory exchanges of taxable chemicals under IRC 4662(c)(2) or sells or buys intermediate hydrocarbon streams containing one or more organic taxable chemicals under IRC 4662(b)(10).

The satisfactory tax history test will be met only if, the Chief, Estate & Gift/Excise Tax Exam is satisfied with the filing, deposit, payment, reporting and claim history for all federal taxes of the applicant or registrant and any related person.

A field visit by an examiner may be warranted to the principal business location of applicants for activities A, B, C, D, E, F, G, I, Q and V.

If the entity is an Indian Tribal Government, refer to IRM 4.24.6.2.14, Excise Examinations of Indian Tribal Government (ITG) Cases, for procedures to follow before visiting an applicant.

Per Treas. Reg. 48.4222(c)-1, the examiner is authorized to recommend revoking the registration of any person registered for activities above, if it is determined that:

For G registrants, the examiner must recommend revoking a registration if it is determined the registrant failed to meet the activity or satisfactory tax history test.

For V registrants, the examiner must recommend revoking a registration if it is determined the registrant failed to comply with Treas. Reg. 52.4682-5(d) and (e).

For a No Penalty Case File, the IMS case file should contain the following documentation:

The case will be closed to the group manager who will sign and issue Letter 4601 to the applicant or registrant, close the IMS case file, and maintain the paper case file in the group.

The E500, supporting workpapers, and a copy of Letter 4601 should be uploaded into the IMS case file before closing.

For an Agreed Penalty Case File, the IMS case file, should include the following completed documents:

The examiner will prepare Letter 4600 and have the group manager sign letter and mail it to the applicant or registrant.

The Form 8278, Form 5384, Form 886-A, E500, supporting workpapers, a copy of Letter 4600, and the applicant’s/registrant’s written response (if applicable), should be uploaded into the IMS case file before closing.

For an Unagreed Penalty Case File, the IMS penalty case file, should contain the following:

The examiner will prepare Letter 4600, which gives the applicant or registrant 30 days to respond. The group manager signs Letter 4600 and mails it to applicant or registrant.

If the applicant or registrant does not agree with the penalty assessment, then they may:

Penalty case files will be closed unagreed and forwarded to CCP for assessment when the applicant or registrant:

An Appeals request requires the case be updated to Status 21 and forwarded to Technical Services.

IRM 25.6.23.7.1, Minimum Time Remaining on ASED, requires a minimum of 365 days remaining on the assessment statute before an unagreed case will be accepted by Appeals.

The Form 8278, Form 5384 (unsigned), Form 886-A, E500, supporting workpapers, a copy of Letter 4600, the applicant’s/registrant’s written response (if applicable), and the examiner’s rebuttal (if applicable), should be uploaded into the IMS case file before closing.

For registrants under IRC 4101, IRC 4101(a)(5) discusses reregistration in the event of change in ownership. Under regulations prescribed by the Secretary, a person (other than a corporation the stock of which is regularly traded on an established securities market) shall be required to reregister under this section if after a transaction (or series of related transactions) more than 50 percent of ownership interests in, or assets of, such person are held by persons other than persons (or persons related thereto) who held more than 50 percent of such interests or assets before the transaction (or series of related transactions). This will require a new Form 637 be filed.

For registrants under IRC 4222, IRC 4662 and IRC 4682, they must notify the IRS within 10 days if any of the information submitted with an application has changed.

For all registrants, a change in EIN number will require a new Form 637 be filed.

Changes in ownership that do not involve obtaining a new Form 637 application will be properly documented on the Case Level Activity Record in IMS by the LT. At a minimum, the LT will:

For changes in ownership that require reregistration under IRC 4101(a)(5) and where the EIN did not change. The LT will:

For changes in ownership that require reregistration under IRC 4101(a)(5) and the EIN change, a new Form 637 application will be required and processed in accordance with the procedures found in IRM 4.24.24.4.3, Status 20 Compliance Check - Overview Initial Application and Sample Reviews Conducted by Form 637 Registration Group TE. Once the case is returned to the LT in Status 30 - LT Review, the assigned LT will:

When notification of a name change is received and the name does not match the name on IMS or IDRS, the LT will:

When notification of a name change is received and the new name does not match IMS, but matches the name on IDRS (e.g., the ENMOD), the LT will:

If a registrant requests to add an additional activity to its approved registration, then a new Form 637 is required for the additional activity. The new Form 637 will be processed in accordance with the established procedures in IRM 4.24.24.4.3, Status 20 Compliance Check - Overview Initial Application and Sample Reviews Conducted by Form 637 Registration Group TE.

When notification is received from a registrant that the taxpayer no longer engages in the activity for which the registrant is approved, the LT will: