Instructions For Form 720 - Quarterly Federal Excise Tax Return

Claim requirements. The following requirements must be

taxable use in a motor vehicle or motorboat, and received

met if the credit exceeds the amount of taxable fuel liability

the required statement from the buyer, or (3) used an

reported.

alternative fuel (not sold at retail or in bulk as previously

described) in a motor vehicle or motorboat is the only

1. The claim must be for an alcohol fuel mixture sold or

person eligible to make this claim.

used during a period that is at least 1 week.

2. The amount of the claim must be at least $200. To

For the alternative fuel mixture credit, the registered

meet this minimum, amounts from lines 12, 13, and 14 may

alternative fueler that produced and sold or used the mixture

be combined.

as a fuel in their trade or business is the only person eligible

to make this claim. The credit is based on the gallons of

If requirements 1 and 2 above are not met, see Annual

alternative fuel in the mixture.

Claims on page 14.

How to claim the credit. Any alternative fuel credit (up to

Registration number. If you are a registered blender or a

the amount of tax imposed on the alternative fuel) and any

taxable fuel registrant, enter your registration number on line

alternative fuel mixture credit must first be taken on

12.

Schedule C to reduce your taxable fuel liability reported on

Form 720.

Line 13. Biodiesel or Renewable Diesel

Alternative fuel credit. The total amount of the

Mixture Credit

alternative fuel credit on Schedule C for the period is limited

Claimant. The person that produced and sold or used the

to the claimant’s liability reported for IRS Nos. 79, 112, 118,

mixture in their trade or business is the only person eligible

120, 121, 122, 123, and 124. Thus, if you are claiming the

to make this claim. The credit is based on the gallons of

alternative fuel credit, you must calculate a reduced number

biodiesel or renewable diesel in the mixture.

of gallons for each alternative fuel. Enter the reduced

number of gallons on line 14 to determine the amount of the

How to claim the credit. Any biodiesel or renewable

diesel mixture credit must first be taken on Schedule C to

alternative fuel credit. Additional gallons may be claimed as

a credit only on Form 4136.

reduce your taxable fuel liability reported on Form 720. Any

excess credit may be taken on Schedule C (Form 720),

To calculate the reduced number of gallons for each

Form 8849, Form 4136, or Form 8864. See Notice 2005-4

alternative fuel, multiply the number of gallons reported for

and item 4 below for more information.

IRS Nos. 112, 118, 120, 121, 122, 123, and 124 on Part I of

Claim requirements. Requirements 1 and 2 must be met

Form 720 by the applicable multiplier. The applicable

only if the credit exceeds the amount of taxable fuel liability

multiplier is as follows:

reported. Requirements 3 and 4 must be met for all claims.

IRS No.

Multiplier

1. The claim must be for a biodiesel or renewable diesel

mixture sold or used during a period that is at least 1 week.

112

.366

2. The amount of the claim must be at least $200. To

118

.368

meet this minimum, amounts from lines 12, 13, and 14 may

be combined.

120

.366

3. The biodiesel or renewable diesel used to produce the

121

.368

biodiesel or renewable diesel mixture meets ASTM D6751

and meets EPA’s registration requirements for fuels and fuel

122

.488

additives under section 211 of the Clean Air Act. Also, the

123

.488

renewable diesel used to produce a renewable diesel

mixture must be derived from biomass (as defined in section

124

.486

45K(c)(3)) using a thermal depolymerization process.

4. The Certificate for Biodiesel and, if applicable,

For example, if you reported tax of $183 for 1000 gallons

Statement of Biodiesel Reseller must be attached to the first

of liquefied petroleum gas (LPG) for IRS No. 112, report 366

claim filed that is supported by the certificate or statement.

gallons as the reduced number of gallons on line 14a (1000

For the renewable diesel mixture credit, you must edit the

gallons × .366) for an alternative fuel credit of $183. Claim

certificate and, if applicable, statement to indicate that the

the alternative fuel credit of $317 for the additional 634

fuel to which the certificate and statement relate is

gallons of LPG on Form 4136.

renewable diesel and state that the renewable diesel meets

If you reported tax on IRS No. 79, Other fuels (see

the requirements discussed above under requirement 3.

instructions), you may increase the alternative fuel credit

See Model Certificate O and Model Statement S in Pub.

claimed on line 14 by the amount of tax reported on IRS No.

510. If the certificate and statement are not attached to

79. Increase the number of gallons of alternative fuel

Form 720 because they are attached to a previously-filed

reported on line 14 by dividing the amount of tax reported for

claim on Schedule 3 (Form 8849) for the biodiesel, attach a

IRS No. 79 by $.50. For example, if you report tax of $183

separate sheet with the following information.

for 1000 gallons of LPG for IRS No. 112, and $244 for 1000

a. Certificate identification number.

gallons of B-100 (100% biodiesel) on IRS No. 79, report 854

b. Total gallons of biodiesel or renewable diesel on

gallons as the reduced number of gallons on line 14a (366 +

certificate.

488) for an alternative fuel credit of $427 (854 gallons ×

c. Total gallons claimed on Schedule 3 (Form 8849).

$.50). Claim the alternative fuel credit of $73 for the

d. Total gallons claimed on Schedule C (Form 720),

additional 146 gallons of LPG on Form 4136.

line 13.

Alternative fuel mixture credit. The total amount of

If requirements 1 and 2 above are not met, see Annual

the alternative fuel mixture credit for the period can be

Claims on page 14.

claimed on Schedule C (Form 720), Schedule 3 (Form

8849), or Form 4136. If claiming on Schedule C (Form 720),

Registration number. If you are a registered blender or a

taxable fuel registrant, enter your registration number on line

you may add this amount to the amount of the alternative

fuel credit claimed, if applicable.

13.

Claim requirements. To claim either credit, you must be

Line 14. Alternative Fuel Credit and

registered by the IRS. To claim the alternative fuel mixture

Alternative Fuel Mixture Credit

credit, the following requirements must be met if the credit

exceeds the amount of taxable fuel liability reported.

Claimant. For the alternative fuel credit, the registered

alternative fueler who (1) sold an alternative fuel at retail and

1. The claim must be for an alternative fuel mixture sold

delivered it into the fuel supply tank of a motor vehicle or

or used (as described earlier under Claimant) during a

motorboat, (2) sold an alternative fuel, delivered it in bulk for

period that is at least 1 week.

-13-

Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2007 Page 13

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