Publication 510 - Excise Taxes For 2005 - Department Of Treasury (Page 10 of 47) in pdf

where only blended fuel, and no other type of

bursements of all liquid products to and from all

Refunds of Second Tax

fuel, is produced. For this purpose, blended fuel

approved terminals. Each terminal operator

is any mixture that would be blended taxable fuel

must file a separate form for each approved

If the tax is paid on more than one taxable event

if produced outside the bulk transfer/terminal

terminal.

for a taxable fuel under section 4081, the person

system.

paying the “second tax” may claim a refund

Form 720-CS. This information return must be

(without interest) of that tax if certain conditions

Registrant. This is a taxable fuel registrant

filed by bulk transport carriers (barges, vessels,

and reporting requirements are met. No credit

(see Registration Requirements, later).

and pipelines) who receive liquid product from

against any tax is allowed for this tax. For infor-

an approved terminal or deliver liquid product to

Removal. This is any physical transfer of tax-

mation about taxable events, see the discus-

an approved terminal.

able fuel. It also means any use of taxable fuel

sions under Gasoline, Diesel Fuel and

other than as a material in the production of

Kerosene, and Aviation-Grade Kerosene later.

Registration Requirements

taxable or special fuels. However, taxable fuel is

Conditions to allowance of refund. A claim

not removed when it evaporates or is otherwise

The following discussion applies to excise tax

for refund of the tax is allowed only if all the

lost or destroyed.

registration requirements for activities relating to

following conditions are met.

Sale. For taxable fuel not in a terminal, this is

fuels only. See Form 637 for other persons who

1. A tax on the fuel was paid to the govern-

the transfer of title to, or substantial incidents of

must register and for more information about

ment and not credited or refunded (the

ownership in, taxable fuel to the buyer for

registration.

“first tax”).

money, services, or other property. For taxable

Persons that must register. You must be

fuel in a terminal, this is the transfer of the

2. After the first tax was imposed, another tax

registered if you are any of the following per-

inventory position if the transferee becomes the

was imposed on the same fuel and was

sons.

position holder for that taxable fuel.

paid to the government (the “second tax”).

•

A blender.

State. This includes any state, any of its politi-

3. The person that paid the second tax filed a

•

cal subdivisions, the District of Columbia, and

An enterer.

timely claim for refund containing the infor-

the American Red Cross. An Indian tribal gov-

•

mation required (see Refund claim, later).

A pipeline operator.

ernment is treated as a state only if transactions

•

4. The person that paid the first tax has met

involve the exercise of an essential tribal gov-

A position holder.

the reporting requirements, discussed

ernment function.

•

A refiner.

next.

Taxable fuel. This means gasoline, diesel

•

A terminal operator.

fuel, or kerosene.

Reporting requirements. Generally, the per-

•

A vessel operator.

Terminal. This is a storage and distribution

son that paid the first tax must file a “First

•

facility supplied by pipeline or vessel, and from

Taxpayer’s Report” with its Form 720 for the

Train operators who uses dyed diesel fuel

which taxable fuel may be removed at a rack. It

quarter to which the report relates. A model first

in their trains and they incur liability for tax

does not include a facility at which gasoline

taxpayer’s report is shown in Appendix A as

at the train rate.

blendstocks are used in the manufacture of

Model Certificate B. The report must contain all

•

Full rate buyers of aviation-grade ker-

products other than finished gasoline if no gaso-

information needed to complete the model.

osene in connection with a removal from a

line is removed from the facility. A terminal does

By the due date for filing the Form 720, you

terminal (other than removal directly into

not include any facility where finished gasoline,

must also send a separate copy of the report to

the fuel tank of an aircraft).

diesel fuel, or kerosene is stored if the facility is

the following address.

•

Internal Revenue Service Center

operated by a registrant and all such taxable fuel

Producers or importers of alcohol,

Cincinnati, OH 45999-0555

stored at the facility has been previously taxed

biodiesel, and agri-biodiesel.

upon removal from a refinery or terminal.

Write “EXCISE – FIRST TAXPAYER’S

Terminal operator. This is any person that

Persons that may register. You may, but are

REPORT” across the top of that copy.

owns, operates, or otherwise controls a termi-

not required to, register if you are any of the

nal.

following persons.

Optional reporting. A first taxpayer’s report

is not required for the tax imposed on any of the

•

Throughputter. This is any person that is a

A feedstock user.

following taxable events.

position holder or that owns taxable fuel within

•

An industrial user.

•

the bulk transfer/terminal system (other than in a

Removal at a terminal rack.

•

terminal).

A throughputter that is not a position

•

Nonbulk entries into the United States.

holder.

Vessel operator. This is the person that oper-

•

Removals or sales by blenders.

•

ates a vessel within the bulk transfer/terminal

An ultimate vendor.

system. However, vessel does not include a

However, if the person liable for the tax expects

Ultimate vendors do not need to be registered to

deep draft ocean-going vessel.

that another tax will be imposed on that fuel, that

buy or sell fuel. However, they must be regis-

person should (but is not required to) file a first

tered to file claims for certain sales of fuel.

Information Returns

taxpayer’s report.

Taxable fuel registrant. This is an enterer, an

Providing information. The first taxpayer

Form 720-TO and Form 720-CS are information

industrial user, a refiner, a terminal operator, or

must give a copy of the report to the buyer of the

returns used to report monthly receipts and dis-

a throughputter who received a Letter of Regis-

fuel within the bulk transfer/terminal system or to

bursements of liquid products. A liquid product is

tration under the excise tax registration provi-

the owner of the fuel immediately before the first

any liquid transported into storage at a terminal

sions and whose registration has not been

tax was imposed, if the first taxpayer is not the

or delivered out of a terminal. For a list of prod-

revoked or suspended. The term registrant as

owner at that time. If an optional report is filed, a

ucts, see the product code table in the Instruc-

used in the discussions of these fuels means a

copy should (but is not required to) be given to

tions for Forms 720-TO and 720-CS.

taxable fuel registrant.

the buyer or owner.

The returns are due the last day of the month

A person that receives a copy of the first

Additional information. See the Form 637

following the month in which the transaction

taxpayer’s report and later sells the fuel within

instructions for the information you must submit

occurs. These returns can be filed on paper or

the bulk transfer/terminal system must give the

when you apply for registration.

electronically. For information on filing electroni-

copy and a “Statement of Subsequent Seller” to

cally, see Publication 3536, Motor Fuel Excise

Failure to register. The penalty for failure to

the buyer. If the later sale is outside the bulk

Tax EDI Guide. Pub. 3536 is only available on

transfer/terminal system and that person ex-

the IRS website.

due to reasonable cause, is increased to

pects that another tax will be imposed, that per-

Form 720-TO. This information return is used

$10,000 for the initial failure, and then $1,000

son should (but is not required to) give the copy

by terminal operators to report receipts and dis-

each day thereafter you fail to register.

and the statement to the buyer. A model state-

Page 10

Publication 510 - Excise Taxes For 2005 - Department Of Treasury Page 10

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