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Filling Out 1040x

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Filling Out 1040x

Filling out 1040x 2. Filling out 1040x   Fuel Tax Credits and Refunds Table of Contents Gasoline and Aviation Gasoline Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation)Sales by Registered Ultimate Vendors Diesel-Water Fuel Emulsion Kerosene for Use in AviationSales by Registered Ultimate Vendors Other Fuels (Including Alternative Fuels) Refunds of Second TaxOptional reporting. Filling out 1040x Providing information. Filling out 1040x Definitions of Nontaxable UsesCustom application of fertilizer and pesticide. Filling out 1040x Fuel used between airfield and farm. Filling out 1040x Fuel not used for farming. Filling out 1040x Vehicles not considered highway vehicles. Filling out 1040x Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture CreditHow to Claim the Credit Filing Claims Claiming A Refund Claiming a Credit on Form 4136 Including the Credit or Refund in Income Federal excise taxes are imposed on certain fuels as discussed in chapter 1. Filling out 1040x This chapter lists the nontaxable uses of each fuel and defines the nontaxable uses. Filling out 1040x Information on the refund of second tax is included. Filling out 1040x This chapter also explains credits and refunds for the biodiesel or renewable diesel mixture credits, and the alternative fuel mixture and alternative fuel credits. Filling out 1040x Information on how to make a claim for credit or refund is included in this chapter and in the instructions for: Form 720, Form 4136, and Form 8849. Filling out 1040x Exported taxable fuel. Filling out 1040x   The claim rates for exported taxable fuel are listed on Schedule C (Form 720), Schedule 1 (Form 8849), and Form 4136. Filling out 1040x Taxpayers making a claim for exported taxable fuel must include with their records proof of exportation. Filling out 1040x Proof of exportation includes: A copy of the export bill of lading issued by the delivering carrier, A certificate by the agent or representative of the export carrier showing actual exportation of the fuel, A certificate of lading signed by a customs officer of the foreign country to which the fuel is exported, or A statement of the foreign consignee showing receipt of the fuel. Filling out 1040x Gasoline and Aviation Gasoline Ultimate Purchasers. Filling out 1040x   The following are the uses of gasoline (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. Filling out 1040x On a farm for farming purposes (credit only). Filling out 1040x Off-highway business use. Filling out 1040x Export. Filling out 1040x In a boat engaged in commercial fishing. Filling out 1040x In certain intercity and local buses. Filling out 1040x In a school bus. Filling out 1040x Exclusive use by a qualified blood collector organization. Filling out 1040x In a highway vehicle owned by the United States that is not used on a highway. Filling out 1040x Exclusive use by a nonprofit educational organization (see Sales by registered ultimate vendors and Credit Card Purchases, later). Filling out 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit Card Purchases, later). Filling out 1040x In an aircraft or vehicle owned by an aircraft museum. Filling out 1040x   The following are the uses of aviation gasoline for which a credit or refund may be allowable to an ultimate purchaser. Filling out 1040x On a farm for farming purposes (credit only). Filling out 1040x Export. Filling out 1040x In foreign trade. Filling out 1040x Certain helicopter and fixed-wing air ambulance uses. Filling out 1040x In commercial aviation (other than foreign trade). Filling out 1040x Exclusive use by a qualified blood collector organization. Filling out 1040x Exclusive use by a nonprofit education organization (see Sales by registered ultimate vendors and Credit card purchases, later). Filling out 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit and purchases, later). Filling out 1040x In an aircraft owned by an aircraft museum. Filling out 1040x In military aircraft. Filling out 1040x Claims by persons who paid the tax to the government. Filling out 1040x   Except for sales to nonprofit educational organizations and states and local governments, a credit or refund is allowable to the person that paid the tax to the government if the gasoline was sold to the ultimate purchaser (including an exporter) by either that person or by a retailer and the fuel was exported; used or sold for use as supplies for vessels or aircraft, including military aircraft, commercial fishing, and foreign trade; sold to a qualified blood collector organization; or used or sold for use in the production of Other Fuels. Filling out 1040x See Filing Claims, later. Filling out 1040x Sales by registered ultimate vendors. Filling out 1040x   This is an ultimate vendor that sells gasoline or aviation gasoline to any of the following and that is purchased without the use of a credit card. Filling out 1040x A state or local government for its exclusive use (including essential government use by an Indian tribal government). Filling out 1040x A nonprofit educational organization for its exclusive use. Filling out 1040x   The registered ultimate vendor may make the claim if the ultimate purchaser did not use a credit card and waives its right to the credit or refund by providing the registered ultimate vendor with a certificate. Filling out 1040x A sample certificate is included as Model Certificate M in the Appendix. Filling out 1040x The registered ultimate vendor must have the certificate at the time the credit or refund is claimed. Filling out 1040x   The ultimate vendor must be registered by the IRS. Filling out 1040x See Registration Requirements, earlier. Filling out 1040x Credit card purchases. Filling out 1040x   If gasoline and aviation gasoline are purchased with a credit card issued to a state or local government for its exclusive use (including essential government use by an Indian tribal government), or a nonprofit educational organization for its exclusive use, the person who extended credit to the ultimate purchaser (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the gasoline or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Filling out 1040x   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Filling out 1040x How to make the claim. Filling out 1040x   If the claim is made by the credit card issuer, see Schedule C  (Form 720) or Schedule 8 (Form 8849). Filling out 1040x Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) For conditions to an allowance of a credit or refund on exported dyed diesel fuel and dyed kerosene, see Exported taxable fuel, earlier. Filling out 1040x Ultimate purchasers. Filling out 1040x   The following are nontaxable uses of diesel fuel and kerosene (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. Filling out 1040x On a farm for farming purposes. Filling out 1040x Off-highway business use. Filling out 1040x Export. Filling out 1040x In a qualified local bus. Filling out 1040x In a school bus. Filling out 1040x Other than as a fuel in a propulsion engine of a diesel-powered highway vehicle (such as home heating oil). Filling out 1040x Exclusive use by a qualified blood collector organization. Filling out 1040x In a highway vehicle owned by the United States that is not used on a highway. Filling out 1040x Exclusive use by a nonprofit educational organization (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). Filling out 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). Filling out 1040x In a vehicle owned by an aircraft museum. Filling out 1040x As a fuel in a propulsion engine of a diesel-powered train. Filling out 1040x Sales by Registered Ultimate Vendors The following are the sales for which a credit or refund may be allowable to the registered ultimate vendor only. Filling out 1040x Undyed diesel fuel or undyed kerosene sold for the exclusive use by a state or local government (if credit card rules (defined later) do not apply), Undyed kerosene sold from a blocked pump (defined below), or Undyed diesel fuel or undyed kerosene used in certain intercity and local buses, only if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. Filling out 1040x Registered ultimate vendor (state use). Filling out 1040x   This is a person that sells undyed diesel fuel or undyed kerosene to a state or local government for its exclusive use (including essential government use by an Indian tribal government). Filling out 1040x The diesel fuel or kerosene must be purchased by the state without the use of a credit card, issued to the state by the credit card issuer, in order for the ultimate vendor to make the claim. Filling out 1040x The ultimate vendor must be registered by the IRS. Filling out 1040x See Registration Requirements, earlier. Filling out 1040x Registered ultimate vendor (blocked pump). Filling out 1040x   This is an ultimate vendor that sells undyed kerosene from a blocked pump. Filling out 1040x   A credit or refund may be allowable to a registered ultimate vendor (blocked pump) if the vendor sold to a buyer undyed kerosene from a blocked pump for use other than as a fuel in a diesel-powered highway vehicle and the vendor had no reason to believe the kerosene would not be used in that manner. Filling out 1040x Blocked pump. Filling out 1040x   A blocked pump is a fuel pump that meets all the following requirements. Filling out 1040x It is used to make retail sales of undyed kerosene for use by the buyer in any nontaxable use. Filling out 1040x It is at a fixed location. Filling out 1040x It is identified with a legible and conspicuous notice stating, “UNDYED UNTAXED KEROSENE, NONTAXABLE USE ONLY. Filling out 1040x ” It meets either of the following conditions. Filling out 1040x It cannot reasonably be used to dispense fuel directly into the fuel supply tank of a diesel-powered highway vehicle or train. Filling out 1040x It is locked by the vendor after each sale and unlocked by the vendor only in response to a buyer's request for undyed kerosene for use other than as a fuel in a diesel-powered highway vehicle or train. Filling out 1040x Registered ultimate vendor (certain intercity and local buses). Filling out 1040x   This is an ultimate vendor that sells undyed diesel fuel or undyed kerosene to the ultimate purchaser for use in certain intercity and local buses. Filling out 1040x   The registered ultimate vendor may make the claim if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. Filling out 1040x A sample waiver is included as Model Waiver N in the Appendix. Filling out 1040x The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. Filling out 1040x Credit Card Purchases. Filling out 1040x   If undyed diesel fuel or kerosene is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the diesel fuel or kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Filling out 1040x   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Filling out 1040x Diesel-Water Fuel Emulsion A claim for credit or refund may be made for the nontaxable use of a diesel-water fuel emulsion and for undyed diesel fuel used to produce a diesel-water fuel emulsion. Filling out 1040x The claim rate for nontaxable use of a diesel-water fuel emulsion taxed at $. Filling out 1040x 198 per gallon is $. Filling out 1040x 197 (if exported, the claim rate is $. Filling out 1040x 198). Filling out 1040x The following are the nontaxable uses for a diesel-water fuel emulsion for which a credit or refund may be allowable to an ultimate purchaser. Filling out 1040x On a farm for farming purposes. Filling out 1040x Off-highway business use. Filling out 1040x Export. Filling out 1040x In a qualified local bus. Filling out 1040x In a school bus. Filling out 1040x Other than as fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway use). Filling out 1040x Exclusive use by a qualified blood collector organization. Filling out 1040x In a highway vehicle owned by the United States that is not used on a highway. Filling out 1040x Exclusive use by a nonprofit educational organization. Filling out 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia. Filling out 1040x In an aircraft or vehicle owned by an aircraft museum. Filling out 1040x Blender claims. Filling out 1040x   The claim rate for undyed diesel fuel taxed at $. Filling out 1040x 244 and used to produce a diesel-water fuel emulsion is $. Filling out 1040x 046 per gallon of diesel fuel so used. Filling out 1040x The blender must be registered by the IRS in order to make the claim. Filling out 1040x The blender must attach a statement to the claim certifying that: The diesel-water fuel emulsion contains at least 14% water, The emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003, Undyed diesel fuel taxed at $. Filling out 1040x 244 was used to produce the diesel-water fuel emulsion, and The diesel-water fuel emulsion was used or sold for use in the blender's trade or business. Filling out 1040x Kerosene for Use in Aviation Ultimate purchasers. Filling out 1040x   Ultimate purchasers of kerosene used in certain aviation uses may make a claim if the rate of tax on their use is less than the rate of tax that was charged on the kerosene. Filling out 1040x   The ultimate purchaser of the kerosene used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) is eligible to make a claim if the ultimate purchaser certifies that the right to make the claim has not been waived. Filling out 1040x Generally, the ultimate purchaser is the aircraft operator. Filling out 1040x   The following are the nontaxable uses of kerosene used in noncommercial aviation for which a credit or refund may be allowable to the ultimate purchaser. Filling out 1040x On a farm for farming purposes. Filling out 1040x Certain helicopter and fixed-wing aircraft uses. Filling out 1040x Exclusive use by a qualified blood collector organization. Filling out 1040x Exclusive use by a nonprofit educational organization. Filling out 1040x In an aircraft owned by an aircraft museum. Filling out 1040x In military aircraft. Filling out 1040x Kerosene for use partly in commercial aviation and partly in nonexempt, noncommercial aviation. Filling out 1040x   If the fuel is used partly for use in commercial aviation and partly for use in nonexempt, noncommercial aviation, the operator may identify, either at the time of purchase or after the kerosene has been used, the amount that will be (or has been) used in commercial aviation. Filling out 1040x At the same time, the operator would either make the claim or waive the right to make the claim for credit or refund of the kerosene for use in commercial and nonexempt, noncommercial aviation. Filling out 1040x   If the operator does not identify the amount of kerosene that will be (or has been) used in commercial aviation, the operator may provide a certificate to the ultimate vendor similar to Model Certificate Q in the Appendix. Filling out 1040x For kerosene purchased with the certificate, used in commercial aviation, and taxed at $. Filling out 1040x 244 per gallon, use of the certificate will be treated as a waiver of the right to claim a credit or refund for the $. Filling out 1040x 025 per gallon part of the tax. Filling out 1040x The ultimate vendor may make this claim. Filling out 1040x The operator may make a claim for the $. Filling out 1040x 175 tax per gallon of the kerosene, but cannot waive the right to make the claim for the $. Filling out 1040x 175 tax per gallon. Filling out 1040x Sales by Registered Ultimate Vendors Kerosene for use in commercial aviation or noncommercial aviation. Filling out 1040x   The registered ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may make this claim if the ultimate purchaser waives its right to the credit or payment by providing the registered ultimate vendor with a waiver. Filling out 1040x A sample waiver is included as Model Waiver L in the Appendix. Filling out 1040x The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. Filling out 1040x   Noncommercial aviation means any use of an aircraft not described as commercial aviation. Filling out 1040x For the definition of commercial aviation, see Commercial aviation on page 11. Filling out 1040x Kerosene for use in nonexempt, noncommercial aviation. Filling out 1040x   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in nonexempt, noncommercial aviation. Filling out 1040x The ultimate vendor must be registered by the IRS (activity letter UA) and have the required certificate from the ultimate purchaser. Filling out 1040x A sample certificate is included as Model Certificate Q in the Appendix. Filling out 1040x The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. Filling out 1040x Kerosene for use in aviation by a state or local government. Filling out 1040x   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in aviation to a state or local government for its exclusive use (including essential government use by an Indian tribal government). Filling out 1040x The kerosene for use in aviation must be purchased by the state without the use of a credit card in order for the ultimate vendor to make the claim. Filling out 1040x The ultimate vendor must be registered by the IRS (activity letter UV) and have the required certificate from the ultimate purchaser. Filling out 1040x A sample certificate is included as Model Certificate P in the Appendix. Filling out 1040x The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. Filling out 1040x Credit card purchases. Filling out 1040x   If taxed kerosene for use in aviation is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Filling out 1040x   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Filling out 1040x Other Fuels (Including Alternative Fuels) Credit or refund for nontaxable use of taxed Other Fuels may be allowable to an ultimate purchaser. Filling out 1040x While tax is generally imposed on delivery, Other Fuels are taxed prior to delivery in the case of certain bulk sales described in chapter 1. Filling out 1040x The following are the nontaxable uses of Other Fuels for which a credit or refund may be allowable to the ultimate purchaser. Filling out 1040x On a farm for farming purposes. Filling out 1040x Off-highway business use. Filling out 1040x In a boat engaged in commercial fishing. Filling out 1040x In certain intercity and local buses. Filling out 1040x In a school bus. Filling out 1040x In a qualified local bus. Filling out 1040x Exclusive use by a qualified blood collector organization. Filling out 1040x Exclusive use by a nonprofit educational organization. Filling out 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia. Filling out 1040x In an aircraft or vehicle owned by an aircraft museum. Filling out 1040x Use in any boat operated by the United States for its exclusive use or any vessel of war of any foreign nation. Filling out 1040x See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit, later. Filling out 1040x Refunds of Second Tax The tax on dyed diesel fuel for inland waterways fuel use applies at the rate listed on Form 720. Filling out 1040x This is in addition to all other taxes imposed on the sale or use of the fuel. Filling out 1040x The section 4081(e) refund (discussed below) cannot be claimed. Filling out 1040x If the tax is paid and reported to the government on more than one taxable event for a taxable fuel under section 4081, the person paying the “second tax” may claim a refund (without interest) of that tax if certain conditions and reporting requirements are met. Filling out 1040x No credit against any tax is allowed for this tax. Filling out 1040x For information about taxable events, see the discussions under Gasoline, Diesel Fuel and Kerosene and Kerosene for Use in Aviation in chapter 1. Filling out 1040x Conditions to allowance of refund. Filling out 1040x   A claim for refund of the tax is allowed only if all the following conditions are met. Filling out 1040x A tax on the fuel was paid to the government and not credited or refunded (the “first tax”). Filling out 1040x After the first tax was imposed, another tax was imposed on the same fuel and was paid to the government (the “second tax”). Filling out 1040x The person that paid the second tax filed a timely claim for refund containing the information required (see Refund claim, later). Filling out 1040x The person that paid the first tax has met the reporting requirements, discussed next. Filling out 1040x Reporting requirements. Filling out 1040x   Generally, the person that paid the first tax must file a “First Taxpayer's Report” with its Form 720 for the quarter to which the report relates. Filling out 1040x A model first taxpayer's report is shown in the Appendix as Model Certificate B. Filling out 1040x The report must contain all information needed to complete the model. Filling out 1040x   By the due date for filing the Form 720, you must also send a separate copy of the report to the following address. Filling out 1040x Department of the Treasury Internal Revenue Service  Cincinnati, OH 45999-0555 Write “EXCISE – FIRST TAXPAYER'S REPORT” across the top of that copy. Filling out 1040x Optional reporting. Filling out 1040x   A first taxpayer's report is not required for the tax imposed on: Removal at a terminal rack, Nonbulk entries into the United States, and Removals or sales by blenders. Filling out 1040x However, if the person liable for the tax expects that another tax will be imposed on that fuel, that person should (but is not required to) file a first taxpayer's report. Filling out 1040x Providing information. Filling out 1040x   The first taxpayer must give a copy of the report to the buyer of the fuel within the bulk transfer/terminal system or to the owner of the fuel immediately before the first tax was imposed, if the first taxpayer is not the owner at that time. Filling out 1040x If an optional report is filed, a copy should (but is not required to) be given to the buyer or owner. Filling out 1040x   A person that receives a copy of the first taxpayer's report and later sells the fuel within the bulk transfer/terminal system must give the copy and a “Statement of Subsequent Seller” to the buyer. Filling out 1040x If the later sale is outside the bulk transfer/terminal system and that person expects that another tax will be imposed, that person should (but is not required to) give the copy and the statement to the buyer. Filling out 1040x A model statement of subsequent seller is shown in the Appendix as Model Certificate A. Filling out 1040x The statement must contain all information necessary to complete the model. Filling out 1040x   If the first taxpayer's report relates to fuel sold to more than one buyer, copies of that report must be made when the fuel is divided. Filling out 1040x Each buyer must be given a copy of the report. Filling out 1040x Refund claim. Filling out 1040x   You must have filed Form 720 and paid the second tax before you file for a refund of that tax. Filling out 1040x You must make your claim for refund on Form 8849. Filling out 1040x Complete Schedule 5 (Form 8849) and attach it to your Form 8849. Filling out 1040x Do not include this claim with a claim under another tax provision. Filling out 1040x You must not have included the second tax in the price of the fuel and must not have collected it from the purchaser. Filling out 1040x You must submit the following information with your claim. Filling out 1040x A copy of the first taxpayer's report (discussed earlier). Filling out 1040x A copy of the statement of subsequent seller if the fuel was bought from someone other than the first taxpayer. Filling out 1040x Definitions of Nontaxable Uses This section provides definitions of the terms used in Table 2-1 for nontaxable uses. Filling out 1040x If applicable, the type of use number from Table 2-1 is indicated in each heading. Filling out 1040x Type of use table. Filling out 1040x   The first column of the table is the number you enter on Form 4136, Form 8849, or Schedule C (Form 720) for that type of use. Filling out 1040x For type of use 2, the mobile machinery parenthetical applies only to Form 8849 and Form 720. Filling out 1040x Table 2-1. Filling out 1040x Type of Use Table No. Filling out 1040x Type of Use 1 On a farm for farming purposes 2 Off-highway business use (for business use other than in a highway vehicle registered or required to be registered for highway use) (other than use in mobile machinery) 3 Export 4 In a boat engaged in commercial fishing 5 In certain intercity and local buses 6 In a qualified local bus 7 In a bus transporting students and employees of schools (school buses) 8 For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway business use) 9 In foreign trade 10 Certain helicopter and fixed-wing aircraft uses 11 Exclusive use by a qualified blood collector organization 12 In a highway vehicle owned by the United States that is not used on a highway 13 Exclusive use by a nonprofit educational organization 14 Exclusive use by a state, political subdivision of a state, or the District of Columbia 15 In an aircraft or vehicle owned by an aircraft museum 16 In military aircraft On a farm for farming purposes (No. Filling out 1040x 1). Filling out 1040x   On a farm for farming purposes means fuel used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. Filling out 1040x Farm. Filling out 1040x   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms; orchards; plantations; ranches; nurseries; ranges; and feed yards for fattening cattle. Filling out 1040x It also includes structures such as greenhouses used primarily for the raising of agricultural or horticultural commodities. Filling out 1040x A fish farm is an area where fish are grown or raised — not merely caught or harvested. Filling out 1040x Farming purposes. Filling out 1040x   As an owner, tenant, or operator, you use fuel on a farm for farming purposes if you use it in any of the following ways. Filling out 1040x To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. Filling out 1040x To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. Filling out 1040x To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. Filling out 1040x To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. Filling out 1040x For this use to qualify, you must have produced more than half the commodity so treated during the tax year. Filling out 1040x Commodity means a single raw product. Filling out 1040x For example, apples and peaches are two separate commodities. Filling out 1040x To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if the planting, etc. Filling out 1040x , is incidental to your farming operations. Filling out 1040x Your tree operations will be incidental only if they are minor in nature when compared to the total farming operations. Filling out 1040x   If any other person, such as a neighbor or custom operator, performs a service for you on your farm for any of the purposes listed in (1) or (2), you are considered to be the ultimate purchaser that used the fuel on a farm for farming purposes. Filling out 1040x However, see Custom application of fertilizer and pesticide, next. Filling out 1040x   If doubt exists whether the owner, the tenant, or the operator of the farm bought the fuel, determine who bore the cost of the fuel. Filling out 1040x For example, if the owner of a farm and the tenant equally share the cost of gasoline that is used on a farm for farming purposes, each can claim a credit for the tax on one-half the fuel used. Filling out 1040x Custom application of fertilizer and pesticide. Filling out 1040x   Fuel used on a farm for farming purposes includes fuel used in the application of fertilizer, pesticides, or other substances, including aerial applications. Filling out 1040x Generally, the applicator is treated as having used the fuel on a farm for farming purposes. Filling out 1040x For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. Filling out 1040x For kerosene used in aviation, the ultimate purchaser may make the claim or waive their right to make the claim to the registered ultimate vendor. Filling out 1040x Fuel used between airfield and farm. Filling out 1040x   Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as a farming purpose. Filling out 1040x Fuel not used for farming. Filling out 1040x   Fuel is not used on a farm for farming purposes if it is used in any of the following ways. Filling out 1040x Off the farm, such as on the highway or in noncommercial aviation, other than fuel used between the airfield and farm described above, even if the fuel is used in transporting livestock, feed, crops, or equipment. Filling out 1040x For personal use, such as mowing the lawn. Filling out 1040x In processing, packaging, freezing, or canning operations. Filling out 1040x In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. Filling out 1040x Off-highway business use (No. Filling out 1040x 2). Filling out 1040x   Off-highway business use means fuel used in a trade or business or in an income-producing activity other than as a fuel in a highway vehicle registered or required to be registered for use on public highways. Filling out 1040x The terms “highway vehicle,” “public highway,” and “registered” are defined below. Filling out 1040x Do not consider any use in a boat as an off-highway business use. Filling out 1040x   Off-highway business use includes fuels used in any of the following ways. Filling out 1040x In stationary machines such as generators, compressors, power saws, and similar equipment. Filling out 1040x For cleaning purposes. Filling out 1040x In forklift trucks, bulldozers, and earthmovers. Filling out 1040x   Generally, this use does not include nonbusiness use of fuel, such as use by minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. Filling out 1040x Example. Filling out 1040x Caroline owns a landscaping business. Filling out 1040x She uses power lawn mowers and chain saws in her business. Filling out 1040x The gasoline used in the power lawn mowers and chain saws qualifies as fuel used in an off-highway business use. Filling out 1040x The gasoline used in her personal lawn mower at home does not qualify. Filling out 1040x Highway vehicle. Filling out 1040x   A highway vehicle is any self-propelled vehicle designed to carry a load over public highways, whether or not it is also designed to perform other functions. Filling out 1040x Examples of vehicles designed to carry a load over public highways are passenger automobiles, motorcycles, buses, and highway-type trucks and truck tractors. Filling out 1040x A vehicle is a highway vehicle even though the vehicle's design allows it to perform a highway transportation function for only one of the following. Filling out 1040x A particular type of load, such as passengers, furnishings, and personal effects (as in a house, office, or utility trailer). Filling out 1040x A special kind of cargo, goods, supplies, or materials. Filling out 1040x Some off-highway task unrelated to highway transportation, except as discussed next. Filling out 1040x Vehicles not considered highway vehicles. Filling out 1040x   Generally, the following kinds of vehicles are not considered highway vehicles for purposes of the credit or refund of fuel taxes. Filling out 1040x Specially designed mobile machinery for nontransportation functions. Filling out 1040x A self-propelled vehicle is not a highway vehicle if all the following apply. Filling out 1040x The chassis has permanently mounted to it machinery or equipment used to perform certain operations (construction, manufacturing, drilling, mining, timbering, processing, farming, or similar operations) if the operation of the machinery or equipment is unrelated to transportation on or off the public highways. Filling out 1040x The chassis has been specially designed to serve only as a mobile carriage and mount (and power source, if applicable) for the machinery or equipment, whether or not the machinery or equipment is in operation. Filling out 1040x The chassis could not, because of its special design and without substantial structural modification, be used as part of a vehicle designed to carry any other load. Filling out 1040x The vehicle must have traveled less than 7,500 miles on public highways during the taxable year. Filling out 1040x Vehicles specially designed for off-highway transportation. Filling out 1040x A vehicle is not treated as a highway vehicle if the vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design, the vehicle's capability to transport a load over a public highway is substantially limited or impaired. Filling out 1040x To make this determination, you can take into account the vehicle's size, whether the vehicle is subject to licensing, safety, or other requirements, and whether the vehicle can transport a load at a sustained speed of at least 25 miles per hour. Filling out 1040x It does not matter that the vehicle can carry heavier loads off highway than it is allowed to carry over the highway. Filling out 1040x Nontransportation trailers and semitrailers. Filling out 1040x A trailer or semi-trailer is not treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for carrying on a nontransportation function at an off-highway site. Filling out 1040x For example, a trailer that is capable only of functioning as an office for an off-highway construction operation is not a highway vehicle. Filling out 1040x Public highway. Filling out 1040x   A public highway includes any road in the United States that is not a private roadway. Filling out 1040x This includes federal, state, county, and city roads and streets. Filling out 1040x Registered. Filling out 1040x   A vehicle is considered registered when it is registered or required to be registered for highway use under the law of any state, the District of Columbia, or any foreign country in which it is operated or situated. Filling out 1040x Any highway vehicle operated under a dealer's tag, license, or permit is considered registered. Filling out 1040x A highway vehicle is not considered registered solely because a special permit allows the vehicle to be operated at particular times and under specified conditions. Filling out 1040x Dual use of propulsion motor. Filling out 1040x   Off-highway business use does not include any fuel used in the propulsion motor of a registered highway vehicle even though that motor also operates special equipment by means of a power take-off or power transfer. Filling out 1040x It does not matter if the special equipment is mounted on the vehicle. Filling out 1040x Example. Filling out 1040x The motor of a registered concrete-mixer truck operates both the engine and the mixing unit by means of a power take-off. Filling out 1040x The fuel used in the motor to run the mixer is not off-highway business use. Filling out 1040x Use in separate motor. Filling out 1040x   Off-highway business use includes fuel used in a separate motor to operate special equipment, such as a refrigeration unit, pump, generator, or mixing unit. Filling out 1040x If you draw fuel from the same tank that supplies fuel to the propulsion motor, you must figure the quantity used in the separate motor operating the special equipment. Filling out 1040x You may make a reasonable estimate based on your operating experience and supported by your records. Filling out 1040x   You can use devices that measure the miles the vehicle has traveled (such as hubometers) to figure the gallons of fuel used to propel the vehicle. Filling out 1040x Add to this amount the fuel consumed while idling or warming up the motor before propelling the vehicle. Filling out 1040x The difference between your total fuel used and the fuel used to propel the vehicle is the fuel used in the separate motor. Filling out 1040x Example. Filling out 1040x Hazel owns a refrigerated truck. Filling out 1040x It has a separate motor for the refrigeration unit. Filling out 1040x The same tank supplies both motors. Filling out 1040x Using the truck's hubometer, Hazel figures that 90% of the fuel was used to propel the truck. Filling out 1040x Therefore, 10% of the fuel is used in an off-highway business use. Filling out 1040x Fuel lost or destroyed. Filling out 1040x   You cannot treat fuel lost or destroyed through spillage, fire, or other casualty as fuel used in an off-highway business use. Filling out 1040x Export (No. Filling out 1040x 3). Filling out 1040x   Export means fuel transported from the United States with the intention that the fuel remain in a foreign country or possession of the United States. Filling out 1040x Fuel is not exported if it is in the fuel supply tank of a vehicle or aircraft. Filling out 1040x In a boat engaged in commercial fishing (No. Filling out 1040x 4). Filling out 1040x   In a boat engaged in commercial fishing means fuel used in taking, catching, processing, or transporting fish, shellfish, or other aquatic life for commercial purposes, such as selling or processing the catch, on a specific trip basis. Filling out 1040x They include boats used in both fresh and salt water fishing. Filling out 1040x They do not include boats used for both sport fishing and commercial fishing on the same trip. Filling out 1040x In certain intercity and local buses (No. Filling out 1040x 5). Filling out 1040x   In certain intercity and local buses means fuel used in a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Filling out 1040x The bus must be engaged in one of the following activities. Filling out 1040x Scheduled transportation along regular routes. Filling out 1040x Nonscheduled operations if the seating capacity of the bus is at least 20 adults, not including the driver. Filling out 1040x Vans and similar vehicles used for van-pooling or taxi service do not qualify. Filling out 1040x Available to the general public. Filling out 1040x   This means you offer service to more than a limited number of persons or organizations. Filling out 1040x If a bus operator normally provides charter operations through travel agencies but has buses available for chartering by the general public, this service is available to the general public. Filling out 1040x A bus does not qualify when its operator uses it to provide exclusive services to only one person, group, or organization. Filling out 1040x Also, intercity bus transportation does not include transporting students and employees of schools or intercity transportation in a qualified local bus. Filling out 1040x In a qualified local bus (No. Filling out 1040x 6). Filling out 1040x   In a qualified local bus means fuel used in a bus meeting all the following requirements. Filling out 1040x It is engaged in furnishing (for compensation) intracity passenger land transportation available to the general public. Filling out 1040x It operates along scheduled, regular routes. Filling out 1040x It has a seating capacity of at least 20 adults (excluding the driver). Filling out 1040x It is under contract with (or is receiving more than a nominal subsidy from) any state or local government to furnish the transportation. Filling out 1040x Intracity passenger land transportation. Filling out 1040x   This is the land transportation of passengers between points located within the same metropolitan area. Filling out 1040x It includes transportation along routes that cross state, city, or county boundaries if the routes remain within the metropolitan area. Filling out 1040x Under contract. Filling out 1040x   A bus is under contract with a state or local government only if the contract imposes a bona fide obligation on the bus operator to furnish the transportation. Filling out 1040x More than a nominal subsidy. Filling out 1040x   A subsidy is more than nominal if it is reasonably expected to exceed an amount equal to 3 cents multiplied by the number of gallons of fuel used in buses on subsidized routes. Filling out 1040x A company that operates its buses along subsidized and unsubsidized intracity routes may consider its buses qualified local buses only when the buses are used on the subsidized intracity routes. Filling out 1040x In a school bus (No. Filling out 1040x 7). Filling out 1040x   In a school bus means fuel used in a bus engaged in the transportation of students or employees of schools. Filling out 1040x A school is an educational organization with a regular faculty and curriculum and a regularly enrolled body of students who attend the place where the educational activities occur. Filling out 1040x For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. Filling out 1040x 8). Filling out 1040x   Diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train (not including off-highway business use) means undyed diesel fuel and undyed kerosene used: For home heating, lighting, and cooking; In boats; In stationary machines, such as generators and compressors; For cleaning purposes; or In minibikes and snowmobiles. Filling out 1040x In foreign trade (No. Filling out 1040x 9). Filling out 1040x   In foreign trade means fuel used in civil aircraft employed in foreign trade or trade between the United States and any of its possessions. Filling out 1040x The term trade includes the transportation of persons or property for hire and the making of the necessary preparations for such transportation. Filling out 1040x In the case of aircraft registered in a foreign country, the country must allow reciprocal benefits for aircraft registered in the United States. Filling out 1040x Certain helicopter and fixed-wing aircraft uses (No. Filling out 1040x 10). Filling out 1040x   Includes: Certain helicopter uses. Filling out 1040x   Certain helicopter uses means fuel used by a helicopter for any of the following purposes. Filling out 1040x Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. Filling out 1040x Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Filling out 1040x Providing emergency medical transportation. Filling out 1040x   During a use described in items (1) and (2), the helicopter must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Filling out 1040x For item (1), treat each flight segment as a separate flight. Filling out 1040x Fixed-wing aircraft uses. Filling out 1040x   Fixed-wing aircraft uses means fuel used by a fixed-wing aircraft for any of the following purposes. Filling out 1040x Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Filling out 1040x Providing emergency medical transportation. Filling out 1040x The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Filling out 1040x During a use described in item (1), the aircraft must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Filling out 1040x Exclusive use by a qualified blood collector organization (No. Filling out 1040x 11). Filling out 1040x   Exclusive use by a qualified blood collector organization means fuel used by the qualified blood collector organization for its exclusive use in the collection, storage, or transportation of blood. Filling out 1040x Qualified blood collector organization. Filling out 1040x   A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered by the IRS, and Registered by the Food and Drug Administration to collect blood. Filling out 1040x In a highway vehicle owned by the United States that is not used on a highway (No. Filling out 1040x 12). Filling out 1040x   In a highway vehicle owned by the United States that is not used on a highway means fuel used in a vehicle that was not used on public highways during the period covered by the claim. Filling out 1040x This use applies whether or not the vehicle is registered or required to be registered for highway use. Filling out 1040x Exclusive use by a nonprofit educational organization (No. Filling out 1040x 13). Filling out 1040x   Exclusive use by a nonprofit educational organization means fuel used by an organization exempt from income tax under section 501(a) that meets both of the following requirements. Filling out 1040x It has a regular faculty and curriculum. Filling out 1040x It has a regularly enrolled body of students who attend the place where the instruction normally occurs. Filling out 1040x   A nonprofit educational organization also includes a school operated by a church or other organization described in section 501(c)(3) if the school meets the above requirements. Filling out 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. Filling out 1040x 14). Filling out 1040x   Exclusive use by a state, political subdivision of a state, or the District of Columbia means fuel purchased by the state or local government for its exclusive use. Filling out 1040x A state or local government is any state, any political subdivision thereof, or the District of Columbia. Filling out 1040x An Indian tribal government is treated as a state only if the fuel is used in an activity that involves the exercise of an essential tribal government function. Filling out 1040x Gasoline, diesel fuel, and kerosene used by the American Red Cross is considered to be the use of these fuels by a state. Filling out 1040x In an aircraft or vehicle owned by an aircraft museum (No. Filling out 1040x 15). Filling out 1040x   In an aircraft or vehicle owned by an aircraft museum means fuel used in an aircraft or vehicle that is owned by an organization that meets all the following requirements. Filling out 1040x It is exempt from income tax as an organization described in section 501(c)(3). Filling out 1040x It is operated as a museum under a state (or District of Columbia) charter. Filling out 1040x It is operated exclusively for acquiring, exhibiting, and caring for aircraft of the type used for combat or transport in  World War II. Filling out 1040x   The aircraft or vehicle (such as a ground servicing vehicle for aircraft) must be used exclusively for the purposes described in item (3). Filling out 1040x In military aircraft (No. Filling out 1040x 16). Filling out 1040x   In a military aircraft means fuel used in an aircraft owned by the United States or any foreign nation and constituting a part of its armed forces. Filling out 1040x In commercial aviation (other than foreign trade). Filling out 1040x   See Commercial aviation, earlier, for the definition. Filling out 1040x Use in a train. Filling out 1040x   Use in a train means fuel used in the propulsion engine of equipment or machinery that rides on rails. Filling out 1040x This includes use in a locomotive, work train, switching engine, and track maintenance machine. Filling out 1040x Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit For alternative fuel mixtures produced after December 31, 2011, see How to Claim the Credit below. Filling out 1040x The section 6426 credit for biodiesel and alternative fuel consists of the biodiesel or renewable diesel mixture credit, alternative fuel credit, and alternative fuel mixture credit. Filling out 1040x Biodiesel or renewable diesel mixture credit claimant. Filling out 1040x   Claimant produced a biodiesel mixture by mixing biodiesel with diesel fuel. Filling out 1040x Claimant produced a renewable diesel mixture by mixing renewable diesel with liquid fuel (other than renewable diesel). Filling out 1040x   The person that produced and sold or used the mixture in their trade or business is the only person eligible to make this claim. Filling out 1040x The credit is based on the gallons of biodiesel or renewable diesel in the mixture. Filling out 1040x Renewable diesel does not include any fuel derived from coprocessing biomass (as defined in section 45K(c)(3)) with a feedstock that is not biomass. Filling out 1040x Claim requirements. Filling out 1040x   See the Instructions for Form 720 for the biodiesel or renewable diesel mixture claim requirements. Filling out 1040x Alternative fuel credit claimant. Filling out 1040x   For the alternative fuel credit, the registered alternative fueler who (1) sold an alternative fuel at retail delivered it into the fuel supply tank of a motor vehicle or motorboat, (2) sold an alternative fuel, delivered it in bulk taxable use in a motor vehicle or motorboat, and received required statement from the buyer, (3) used an alternative fuel (not sold at retail or in bulk as previously described) motor vehicle or motorboat, or (4) sold an alternative fuel used as a fuel in aviation is the only person eligible to make this claim. Filling out 1040x Carbon capture requirement. Filling out 1040x   A credit for Fischer-Tropsch process liquid fuel derived from coal (including peat) can be claimed only if the fuel is derived from coal produced at a gasification facility that separates and sequesters at least 75% of the facility's total carbon dioxide emissions. Filling out 1040x Alternative fuel credit. Filling out 1040x   The registered alternative fueler is the person eligible to make the claim. Filling out 1040x An alternative fueler is the person liable for tax on alternative fuel under the rules for taxable events for Other Fuels (discussed in chapter 1) or would be liable but for an exemption for nontaxable uses. Filling out 1040x An alternative fueler includes a person who sells for use or uses an alternative fuel in aviation. Filling out 1040x Alternative fuel mixture credit claimant. Filling out 1040x   For the alternative fuel mixture credit, the registered alternative fueler that produced and sold or used the mixture as a fuel in their trade or business is the only person eligible to make this claim. Filling out 1040x The credit is based on the gallons of alternative fuel in the mixture. Filling out 1040x An alternative fuel mixture is a mixture of alternative fuel and section 4081 taxable fuel (gasoline, diesel fuel, or kerosene). Filling out 1040x Registration. Filling out 1040x   You must be registered by the IRS to be eligible to claim the section 6426 fuel credit. Filling out 1040x See Registration Requirements in chapter 1. Filling out 1040x Credits for fuel provide incentive for United States production. Filling out 1040x   The section 6426 fuel credit may not be claimed for alternative fuel that is produced outside the United States for use as a fuel outside the United States. Filling out 1040x The United States includes any possession of the United States. Filling out 1040x Credit for fuels derived from paper or pulp production. Filling out 1040x   Credit for alternative fuels and alternative fuel mixtures for any fuel derived from the production of paper or pulp are not available for fuel sold or used on or after December 31, 2009. Filling out 1040x How to Claim the Credit Any biodiesel or renewable diesel mixture credit must first be claimed on Schedule C to reduce your taxable fuel liability reported on Form 720. Filling out 1040x Any excess credit may be claimed on Schedule C (Form 720), Schedule 3 (Form 8849), Form 4136, or Form 8864, Biodiesel and Renewable Diesel Fuels Credit. Filling out 1040x See Notice 2005-4 and the Instructions for Form 720 for more information. Filling out 1040x Also see Notice 2013-26 on page 984 of I. Filling out 1040x R. Filling out 1040x B. Filling out 1040x 2013-18 at www. Filling out 1040x irs. Filling out 1040x gov/pub/irs-irbs/irb13-18. Filling out 1040x pdf; and see chapter 2, later. Filling out 1040x Coordination with income tax credit. Filling out 1040x   Only one credit may be taken for any amount of biodiesel or renewable diesel. Filling out 1040x If any amount is claimed (or will be claimed) for any amount of biodiesel or renewable diesel on Form 720, Form 8849, or Form 4136, then a claim cannot be made on Form 8864 for that amount of biodiesel or renewable diesel. Filling out 1040x   Any alternative fuel credit must first be claimed on Schedule C (Form 720) to reduce your section 4041 taxable fuel liability for alternative fuel and CNG reported on Form 720. Filling out 1040x Any excess credit may claimed on Schedule C (Form 720), Schedule 3 (Form 8849), or Form 4136. Filling out 1040x   For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit can be claimed on Schedule C (Form 720), not on Form 4136 or Schedule 3 (Form 8849), and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel fuel and kerosene reported on Form 720. Filling out 1040x   Calculate the limitation for alternative fuel mixtures separately and enter on Schedule C (Form 720), line 14, only the gallons of mixtures that do not exceed your section 4081 taxable fuel liability. Filling out 1040x Filing Claims This section tells you how to make a claim for a credit or refund of excise taxes on fuels. Filling out 1040x This section also covers recordkeeping requirements and when to include the credit or refund in your income. Filling out 1040x Generally, you will provide all the information needed to claim a credit or refund when you properly complete Form 8849, Form 4136, Schedule C (Form 720), Form 6478, or Form 8864. Filling out 1040x In some cases, you will have to attach additional information. Filling out 1040x You need to keep records that support your claim for a credit or refund. Filling out 1040x Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. Filling out 1040x Ultimate purchaser. Filling out 1040x   Ultimate purchasers may make claims for the nontaxable use of fuels on Form 4136, Schedule 1 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. Filling out 1040x If you are an ultimate purchaser, you must keep the following records. Filling out 1040x The number of gallons purchased and used during the period covered by your claim. Filling out 1040x The dates of the purchases. Filling out 1040x The names and addresses of suppliers and amounts purchased from each in the period covered by your claim. Filling out 1040x The nontaxable use for which you used the fuel. Filling out 1040x The number of gallons used for each nontaxable use. Filling out 1040x It is important that your records show separately the number of gallons used for each nontaxable use that qualifies as a claim. Filling out 1040x If the fuel is exported, you must have proof of exportation. Filling out 1040x   For more information about keeping records, see Publication 583, Starting a Business and Keeping Records, or chapter 1 of Publication 17, Your Federal Income Tax for Individuals. Filling out 1040x Exceptions. Filling out 1040x    Generally, the ultimate purchaser may not claim a credit or refund for undyed diesel fuel, undyed kerosene, or kerosene for use in aviation sold for the exclusive use of a state or local government. Filling out 1040x However, see Claims by credit card issuers, later, for an exception. Filling out 1040x The ultimate purchaser may not claim a credit or refund as follows. Filling out 1040x The ultimate purchaser of gasoline or aviation gasoline used by a state or local government for its exclusive use or by a nonprofit educational organization for its exclusive use may waive its right to make a claim by providing a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate M. Filling out 1040x A new certificate is required each year or when any information in the current certificate expires. Filling out 1040x The ultimate purchaser of kerosene for use in commercial aviation or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver L. Filling out 1040x A new waiver is required each year or when any information in the current waiver expires. Filling out 1040x The ultimate purchaser of undyed diesel fuel or undyed kerosene used in certain intercity and local buses may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver N. Filling out 1040x A new waiver is required each year or when any information in the current waiver expires. Filling out 1040x The ultimate purchaser of kerosene for use in nonexempt, noncommercial aviation must provide a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate Q. Filling out 1040x A new certificate is required each year or when any information in the current certificate expires. Filling out 1040x Registered ultimate vendor. Filling out 1040x   Registered ultimate vendors may make claims for certain sales of fuels on Form 4136, Schedule 2 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. Filling out 1040x If you are a registered ultimate vendor, you must keep certain information pertaining to the sale of the fuel. Filling out 1040x   To make a claim, you must have sold the fuel at a tax-excluded price, repaid the tax to the buyer, or obtained the buyer's written consent to the allowance of the claim. Filling out 1040x You are required to have a valid certificate or waiver in your possession in order to make the claim. Filling out 1040x   In addition, you must have a registration number that has not been revoked or suspended. Filling out 1040x See Form 637. Filling out 1040x State use. Filling out 1040x   To make a claim as an ultimate vendor (state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained below. Filling out 1040x If you sell undyed diesel fuel, undyed kerosene, or kerosene for use in aviation for use by a state or local government, you must keep the following information. Filling out 1040x The name and taxpayer identification number of each person (government unit) that bought the fuel. Filling out 1040x The number of gallons sold to each person. Filling out 1040x An unexpired certificate from the buyer. Filling out 1040x See Model Certificate P in the Appendix. Filling out 1040x The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. Filling out 1040x Nonprofit educational organization and state use. Filling out 1040x   To make a claim as an ultimate vendor (nonprofit educational organization or state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained later. Filling out 1040x If you sell gasoline or aviation gasoline to a nonprofit educational organization for its exclusive use or to a state or local government for its exclusive use, you must keep the following information. Filling out 1040x The name and taxpayer identification number of each person (nonprofit educational organization or government unit) that bought the fuel. Filling out 1040x The number of gallons sold to each person. Filling out 1040x An unexpired certificate from the buyer. Filling out 1040x See Model Certificate M in the Appendix. Filling out 1040x  The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. Filling out 1040x Blocked pump. Filling out 1040x   To make a claim as an ultimate vendor (blocked pump), you must have a UP registration number. Filling out 1040x If you sell undyed kerosene (other than kerosene for use in aviation) from a pump that qualifies as a blocked pump because it is locked by you after each sale and is unlocked by you at the request of the buyer, you must keep the following information for each sale of more than 5 gallons. Filling out 1040x The date of each sale. Filling out 1040x The name and address of the buyer. Filling out 1040x The number of gallons sold to that buyer. Filling out 1040x Certain intercity and local bus use. Filling out 1040x   To make a claim as an ultimate vendor of undyed diesel fuel or undyed kerosene used in certain intercity and local buses, you must have a UB registration number. Filling out 1040x You must keep the following information. Filling out 1040x The date of each sale. Filling out 1040x The name and address of the buyer. Filling out 1040x The number of gallons sold to the buyer. Filling out 1040x A copy of the waiver signed by the buyer at the time the credit or payment is claimed. Filling out 1040x See Model Waiver N in the Appendix. Filling out 1040x Kerosene for use in commercial aviation or noncommercial aviation. Filling out 1040x   To make a claim as an ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia), you must have a UA registration number. Filling out 1040x See Kerosene for use in aviation, earlier, for a list of nontaxable uses. Filling out 1040x You must keep the following information. Filling out 1040x The date of each sale. Filling out 1040x The name and address of the buyer. Filling out 1040x The number of gallons sold to the buyer. Filling out 1040x A copy of the waiver signed by the buyer at the time the credit or payment is claimed. Filling out 1040x See Model Waiver L in the Appendix. Filling out 1040x Kerosene for use in nonexempt, noncommercial aviation. Filling out 1040x   To make a claim as an ultimate vendor of kerosene for use in nonexempt, noncommercial aviation, you must have a UA registration number. Filling out 1040x You must keep the following information. Filling out 1040x The date of each sale. Filling out 1040x The name and address of the buyer. Filling out 1040x The number of gallons sold to the buyer. Filling out 1040x A copy of the certificate signed by the buyer at the time the credit or payment is claimed. Filling out 1040x See Model Certificate Q in the Appendix. Filling out 1040x Claims by credit card issuers. Filling out 1040x   For sales of gasoline, aviation gasoline, diesel fuel, kerosene, or kerosene for use in aviation that are purchased by an exempt user with the use of a credit card, the registered credit card issuer is the only person who can make the claim. Filling out 1040x An exempt user for this purpose is: For gasoline or aviation gasoline, a state or local government (including essential government use by an Indian tribal government) or a nonprofit educational organization; or For diesel fuel, kerosene, or kerosene for use in aviation, a state or local government (including essential government use by an Indian tribal government). Filling out 1040x   If gasoline is purchased without the use of a credit card, then the registered ultimate vendor of the gasoline may make the claim for refund or credit. Filling out 1040x However, if the gasoline is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. Filling out 1040x   If diesel fuel, kerosene, or kerosene for use in aviation is purchased without the use of a credit card, the registered ultimate vendor may make the claim for refund or credit. Filling out 1040x A state is not allowed to make a claim for these fuels. Filling out 1040x However, if the diesel fuel or kerosene is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. Filling out 1040x   The claim from the credit card issuer must contain the following information as it applies to the fuel covered in the claim. Filling out 1040x The total number of gallons. Filling out 1040x Its registration number. Filling out 1040x A statement that it has not collected the amount of tax from the ultimate purchaser or has obtained the written consent of the ultimate purchaser to make the claim. Filling out 1040x A statement that it has repaid or agreed to repay the amount of tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to make the claim, or has otherwise made arrangements which directly or indirectly provide the ultimate vendor with reimbursement of the tax. Filling out 1040x Has in its possession an unexpired certificate similar to Model Certificate R in the Appendix and has no reason to believe any of the information in the certificate is false. Filling out 1040x Taxpayer identification number. Filling out 1040x   To file a claim, you must have a taxpayer identification number. Filling out 1040x Your taxpayer identification number can be an: Employer identification number (EIN), Social security number (SSN), or Individual taxpayer identification number (ITIN), if you are an alien individual and do not have and are not eligible to get an SSN. Filling out 1040x   If you normally file only a U. Filling out 1040x S. Filling out 1040x individual income tax return (such as Form 1040 or 1040NR), use your SSN or ITIN. Filling out 1040x You get an SSN by filing Form SS-5, Application for a Social Security Card, with the Social Security Administration. Filling out 1040x To get an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. Filling out 1040x   If you operate a business, use your EIN. Filling out 1040x If you do not have an EIN, you may apply for one online. Filling out 1040x Go to the IRS website at irs. Filling out 1040x gov/businesses/small and click on the “Employer ID Numbers (EINs)” link. Filling out 1040x You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Filling out 1040x Claiming A Refund Generally, you may claim a refund of excise taxes on Form 8849. Filling out 1040x Complete and attach to Form 8849 the appropriate Form 8849 schedules. Filling out 1040x The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. Filling out 1040x If you file Form 720, you can use the Schedule C (Form 720) for your refund claims for the quarter. Filling out 1040x See the Instructions for Form 720. Filling out 1040x Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Schedule C (Form 720) or Form 4136. Filling out 1040x The alternative fuel mixture credit must be claimed on Schedule C (Form 720) against your section 4081 taxable fuel liability for gasoline, diesel, and kerosene and any excess is not allowed. Filling out 1040x The alternative fuel credit must first be claimed on Schedule C (Form 720) against your section 4041 taxable fuel liability for alternative fuel and CNG. Filling out 1040x To the extent the alternative fuel credit exceeds this taxable fuel liability, a payment is allowed and may be claimed as a credit on Schedule C (Form 720), or as an income tax credit on Forms 4136, 6478, or 8864, as applicable. Filling out 1040x Only one claim may be made for any particular amount of alternative fuel. Filling out 1040x Claiming a Credit on Form 4136 For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit cannot be claimed on Form 4136. Filling out 1040x See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2, earlier. Filling out 1040x A credit may be claimed for certain uses and sales of fuels on Form 4136 when you file your income tax return at the end of the year. Filling out 1040x If you meet certain requirements (discussed earlier), you may be able to make a claim during the year. Filling out 1040x Credit only. Filling out 1040x   You can claim the following taxes only as a credit on Form 4136. Filling out 1040x Tax on fuels used for nontaxable uses if the total for your tax year is less than $750. Filling out 1040x Tax on fuel you did not include in any claim for refund previously filed for any quarter of your tax year. Filling out 1040x Tax on fuel you used in mobile machinery (off-highway business use) that traveled less than 7,500 miles on public highways. Filling out 1040x Do not claim a credit for any amount for which you have filed a refund claim on Form 8849 or credit on Schedule C (Form 720). Filling out 1040x When to file. Filling out 1040x   You can claim a fuel tax credit on your income tax return for the year you used the fuel (or sold the fuel in the case of a registered ultimate vendor claim). Filling out 1040x You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. Filling out 1040x Generally, you must file an amended return by the later of 3 years from the date you filed your original return or within 2 years from the date you paid the income tax. Filling out 1040x How to claim a credit. Filling out 1040x   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, or farmers' cooperative association. Filling out 1040x Individuals. Filling out 1040x   You claim the credit on the “Credits from” line of Form 1040. Filling out 1040x Also check box b on that line. Filling out 1040x If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. Filling out 1040x Partnerships. Filling out 1040x   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Filling out 1040x , showing each partner's share of the number of gallons of each fuel sold or used for a non
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LB&I Directives

LB&I Directives provide administrative guidance to LB&I examiners to ensure consistent tax administration and on matters relating to internal operations. The Directives do not establish Service position on legal issues and are not legal guidance.

LB&I (formerly LMSB) Directives

 
2014
02-28-14 Large Business and International Directive on Information Document Requests Enforcement Process
01-27-14 Updated Guidance on the Examination of Milestone Payments in the Acquisition of Businesses
01-21-14 De-coordination of All LB&I Coordinated Issue Papers
2013  
11-04-13 Large Business and International Directive on Information Document Requests Enforcement Process
10-29-13 Updated Guidance for Examiners on I.R.C. § 199 Benefits and Burdens of Ownership Analysis in Contract Manufacturing Arrangements
07-24-13 Guidance for Examiners on I.R.C. § 199 Benefits and Burdens of Ownership Analysis in Contract Manufacturing Arrangements
06-18-13 Large Business & International on Information Document Requests (IDRs)
06-10-13 Large Business & International Directive for Taxpayers Changing to the Method of Accounting Provided in Rev. Proc. 2013-24 for Steam or Electric Generation Property
05-02-13 Extension of Transition Rules for Taxpayers Adopting the Safe Harbor Method of Accounting for Electric Transmission and Distribution Property - LB&I Directive #2
04-29-13 Examination of Milestone Payments in the Acquisition of Businesses
03-22-13 UPDATED LB&I DIRECTIVE for Taxpayers Who Adopted a Method of Accounting Relating to the Conversion of Capitalized Assets to Repair Expense under I.R.C. Section 263(a)
2012  
12-07-12 Railroad Industry Capitalization Issues Impacted by the March 15, 2012, Stand Down Directive (LB&I-4-0312-004) Released after the Temporary Tangible Regulations were Issued December 23, 2011
12-07-12 Guidance for Computing and Substantiating the Credit for Increasing Research Activities under Section 41 of the Internal Revenue Code for Activities involved in Developing New Pharmaceutical Drugs and Therapeutic Biologics
08-17-12 Tiered Issues
07-30-12 I.R.C. §166: LB&I Directive Related to Partial Worthlessness Deduction for Eligible Securities Reported by Insurance Companies
03-15-12 LB&I Directive for TPs who adopted a Method of Accounting Relating to the Conversion of Capitalized Assets to Repair Expense under I.R.C. § 263(a)
01-23-12 Large Business and International Directive Wireless Telecommunication Assets
01-23-12 Large Business & International Directive Telecommunication Carriers Change in Method of Accounting Relating to Conversion of Capitalized Assets to Repair Expense Under I.R.C. Section 263(a)
2011  
11-25-11 Large Business & International Directive Transition Rules for Taxpayers Adopting the Safe Harbor Method of Accounting for Electric Transmission and Distribution Property
11-09-11 Consent of Director Provisions for a Voluntary Change in Method of Accounting under Rev. Proc. 2011-14, APPENDIX Section 15.11
11-01-11 UTP Guidance and Procedures for the Field
08-31-11 UTP Guidance and Procedures for the Compliance Assurance Process (CAP) Program
07-28-11 Examination of Success-Based Fees in the Acquisition of Businesses
 
07-15-11 Guidance for Examiners and Managers on the Codified Economic Substance Doctrine and Related Penalties
05-11-11 Centralized Management of LB&I Returns with UTP Schedules
04-14-11

I.R.C. §475: Field Directive related to Mark-to-Market Valuation
Frequently Asked Questions for I.R.C. § 475

03-30-11 Industry Director’s Directive # 2—Employment Tax and the Employees on the U.S. Outer Continental Shelf
03-28-11 LB&I Alert - Cases Forwarded to Appeals That Involve a Section 965 Transfer Pricing Adjustment Under Section 482
03-01-11 Field Guidance on the Planning & Examination of Sales-Based Royalty Payments and Sales-Based Vendor Allowances
02-04-11 Industry Directive to Withdraw Prior IDD on FSC IRC § 921-927 Bundle of Rights in Software Issue
2010  
09-24-10 Field Directive on Treatment of Sales-Based Vendor Allowances (“SBVA”) and Margin Protection Payments (“MPP”) under § 471
09-14-10 Codification of Economic Substance Doctrine and Related Penalties

07-26-10

Directive on Examination Action With Respect to Certain Gain Recognition Agreements

05-20-10 Examination of Dividends Received Deduction on Separate Accounts of Life Insurance Companies

05-13-10

Use of Delegation Order (DO) 4-25 on Appeals Settlement Position (ASP) for the I.R.C. § 41 Research Credit – Intra-Group Receipts from Foreign Affiliates (IRM 4.46.5.6)
2009  
11-03-09 Field Directive on the Use of Estimates from Probability Samples
10-28-09 Industry Director Directive #1 on United States Outer Continental Shelf Activity

2006

 
07-31-06 Industry Director Directive on Deductibility of Casino Complimentary Goods and Services
07-11-06 Industry Director Directive on Asset Class and Depreciation for Casino Construction Costs
04-11-06 Industry Director Directive on Qualified Intermediary Audit Reports for Audit Years after 2004
03-16-06 Industry Director Directive on Treatment of Semiconductor Assembly and Test Activities as Manufacturing
01-13-06 Industry Director Directive on Examination of IRC § 847
01-12-06 Industry Director Directive on Examination of Multiple Parties in Intermediary Transaction Tax Shelters as described in Notice 2001-16

2005

 
11-28-05 Industry Director Directive on the Planning and Examination of Cost Segregation Issues in the Biotech/Pharmaceutical Industry
08-26-05 Industry Director Directive Amended Returns/Refund Claims Containing Invalid IRC § 280(C)(3) Elections
05-20-05 Industry Director Directive Examination of Transaction Costs in the Acquisition of Businesses
03-14-05 Industry Director Directive in Response to Electric Utility Taxpayers' Attempts to Reclassify Utility Property for MACRS Depreciation Purposes
03-04-05 Field Guidance on the Planning and Examination of the Cyclical Overhauls, Betterments, and Rebuilds of Locomotives for Class I Railroads
03-04-05 Field Guidance on the Planning and Examination of the Cyclical Overhauls, Betterments, and Rebuilds of Freight Cars for Class I Railroads
01-05-05 Industry Director Directive on Disposition of Income Forecast Method Issues

2004

 
12-27-04 Planning and Examination of Cost Segregation Issues in the Restaurant Industry
12-16-04 Planning and Examination of Cost Segregation Issues in the Retail Industry
10-12-04 IRC Sec. 907 Evaluating Taxpayer Methods of Determining Foreign Oil and Gas Extraction Income (FOGEI) and Foreign Oil Related Income (FORI)
07-31-04 Cost Depletion - Determination of Recoverable Reserves
04-30-04 Planning and Examination of Research Credit Issues in a Branded Pharmaceutical Company
 
 
 
 
04-16-04 Timber Casualty Losses
 

° Exhibit A - Timber Casualty Loss Audit Techniques Guide

 

° Exhibit B - Issue Paper on Timber Casualty Losses - Valuation of a Single Identifiable Property

02-02-04 IRC § 29 Credits Claimed on Solid Synthetic Fuel from Coal - Significant Chemical Change Issue

2003

 

11-14-03

Foreign Sales Corporations (FSC) IRC § 921-927 Bundle of Rights in Software Issue

10-24-03

Examination Procedures for Sports Franchise Acquisitions

10-24-03

Examination of Sports Franchise Acquisitions

10-17-03

Examination of Legally Mandated Research and Experimentation Expenses in the Biotech and Pharmaceutical Industries

06-02-03

Qualified Intermediary Audit Reports for Audit Years Before 2005

03-24-03

Planning and Examination of Construction "Tenant" Allowances for Leases Greater Than 15 Years

03-14-03

Assertion of the Penalty for Failure to Deposit Employment Taxes

03-07-03

Asset Class and Depreciation for Casino Construction Costs

03-07-03

Audit Procedures to Determine Recovery Period of Various Components of a Casino/Hotel Complex

01-21-03

Planning and Examination of Research Credit - Generic Drugs

2002

 

10-16-02

Planning and Examination of Developer Inducements

04-26-02

Guidelines for Intangibles Under IRC § 263(a)

04-08-02

MACRS Asset Categories for Refinery Assets

02-26-02

Guidelines for the Application of Advance Notice of Rulemaking for Intangibles Under IRC § 263(a)

02-25-02

Audit Procedures for Golf Course Land Improvements - Change in Accounting Method

02-07-02

Depreciable Golf Course Land Improvements and the Impact of Rev. Rul. 2001-60

2001

 

12-12-01

Conformity Election for Bank Bad Debts

06-08-01

Field Guidance on the Planning and Examination of the Heavy Maintenance Visit (HMV) on Airframes
Page Last Reviewed or Updated: 28-Feb-2014

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