Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2006 Page 10
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16reduced the income tax liability. See Publication 510 for
No.
Type of Use
more information.
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In an aircraft or vehicle owned by an aircraft
museum
Do not use Schedule C:
•
If you are not reporting a liability on Form 720, in Part I or
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In military aircraft
Part II.
•
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For use in the production of alternative fuel
To claim amounts that you took or will take as a credit on
Form 4136, Credit for Federal Tax Paid on Fuels, or as a
Claim requirements for lines 1 through 6 and lines
refund on Form 8849, Claim for Refund of Excise Taxes,
15b – 15d. The following requirements must be met.
and its separate schedules (see the Caution below).
•
To request an abatement or refund of interest under
1. The amount of the claim must be at least $750
section 6404(e) (due to IRS errors or delays) or an
(combining amounts on lines 1, 2, 3, 4, 5, 6, 15b, 15c, and
abatement or refund of a penalty or addition to tax under
15d). This amount may be met by:
section 6404(f) (due to erroneous IRS written advice).
a. Making a claim for fuel used during any quarter of a
Instead, use Form 843, Claim for Refund and Request for
claimant’s income tax year, or
Abatement. Also use Form 843 to request refund of the
b. Aggregating amounts from any quarters of the
penalty under section 6715 for misuse of dyed fuel.
claimant’s income tax year for which no other claim has
•
To make adjustments to liability reported on Forms 720
been made.
filed for prior quarters, use Form 720X.
2. Claims must be filed during the first quarter following
the last quarter of the claimant’s income tax year included in
If you make a claim for alcohol, biodiesel or
the claim. For example, a calendar year income taxpayer’s
!
renewable diesel, or alternative fuel used to produce
claim for the first quarter is due June 30 if filed on Form
a mixture, claim for refund or credit on Form 8849,
8849. However, Form 720 must be filed by April 30.
CAUTION
Form 4136, Form 6478, or Form 8864 can only be made
3. Only one claim may be filed for any quarter.
after the sum of the alcohol fuel mixture credit, biodiesel or
4. The fuel must have been used for a nontaxable use
renewable diesel mixture credit, and alternative fuel mixture
during the period of claim.
credit is first applied to reduce your taxable fuel liability
5. The ultimate purchaser is the only person eligible to
reported on Form 720 for any particular quarter. See Pub.
make the claim.
510, Notice 2005-4, and Notice 2005-62 for more
If requirements 1-3 above are not met, see Annual
information.
Claims on page 14.
Type of Use Table
Exported taxable fuel. The claim rates for exported
taxable fuel are listed on lines 1b, 2c, 3e, and 4d, and in the
The following table lists the nontaxable uses of fuels. You
instructions for lines 15b and 15c. Taxpayers making a claim
must enter the number from the table in the Type of use
for exported taxable fuel must include with their records
column as required.
proof of exportation. Proof of exportation includes:
•
A copy of the export bill of lading issued by the delivering
No.
Type of Use
carrier,
•
1
On a farm for farming purposes
A certificate by the agent or representative of the export
carrier showing actual exportation of the fuel,
2
Off-highway business use (for business use other
•
A certificate of lading signed by a customs officer of the
than in a highway vehicle registered or required to
foreign country to which the fuel is exported, or
be registered for highway use) (other than use in
•
A statement of the foreign consignee showing receipt of
mobile machinery)
the fuel.
3
Export
Line 1. Nontaxable Use of Gasoline
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In a boat engaged in commercial fishing
Allowable uses. The gasoline must have been used during
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In certain intercity and local buses
the period of claim for type of use 2, 4, 5, 7, or 12. For
exported gasoline, see Exported taxable fuel above. Type of
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In a qualified local bus
use 2 does not include any personal use or use in a
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In a bus transporting students and employees of
motorboat.
schools (school buses)
Line 2. Nontaxable Use of Aviation Gasoline
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For diesel fuel and kerosene (other than kerosene
used in aviation) used other than as a fuel in the
Allowable uses. For line 2b, the aviation gasoline must
propulsion engine of a train or diesel-powered
have been used during the period of claim for type of use 9,
highway vehicle (but not off-highway business use)
10, or 16. For exported aviation gasoline, see Exported
taxable fuel above.
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In foreign trade
Line 3. Nontaxable Use of Undyed Diesel
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Certain helicopter and fixed-wing aircraft uses
Fuel
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Exclusive use by a qualified blood collector
organization (beginning after December 31, 2006)
Ultimate purchasers use line 3d to make claims for
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diesel fuel used on a farm for farming purposes.
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In a highway vehicle owned by the United States
that is not used on a highway
CAUTION
Allowable uses. For line 3a, the diesel fuel must have
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Exclusive use by a nonprofit educational
organization
been used during the period of claim for type of use 2, 6, 7,
8, or 12. For exported undyed diesel fuel, see Exported
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Exclusive use by a state, political subdivision of a
taxable fuel above. Type of use 2 does not include any
state, or the District of Columbia
personal use or use in a motorboat. Type of use 8 includes
use as heating oil and use in a motorboat.
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