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Www myfreetaxes com tampa 1. Www myfreetaxes com tampa   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. Www myfreetaxes com tampa Gasoline and Aviation GasolineTaxable Events Gasoline Blendstocks Diesel Fuel and KeroseneTaxable Events Dyed Diesel Fuel and Dyed Kerosene Alaska and Feedstocks Back-up Tax Diesel-Water Fuel Emulsion Kerosene for Use in AviationTaxable Events Liability For Tax Surtax on any liquid used in a fractional ownership program aircraft as fuel Certificate for Commercial Aviation and Exempt UsesExempt use. Www myfreetaxes com tampa Reseller statement. Www myfreetaxes com tampa Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. Www myfreetaxes com tampa Deep-draft ocean-going vessels. Www myfreetaxes com tampa Passenger vessels. Www myfreetaxes com tampa Ocean-going barges. Www myfreetaxes com tampa State or local governments. Www myfreetaxes com tampa Cellulosic or Second Generation Biofuel Not Used as Fuel Biodiesel Sold as But Not Used as Fuel Definitions Excise taxes are imposed on all the following fuels. Www myfreetaxes com tampa Gasoline, including aviation gasoline and gasoline blendstocks. Www myfreetaxes com tampa Diesel fuel, including dyed diesel fuel. Www myfreetaxes com tampa Diesel-water fuel emulsion. Www myfreetaxes com tampa Kerosene, including dyed kerosene and kerosene used in aviation. Www myfreetaxes com tampa Other Fuels (including alternative fuels). Www myfreetaxes com tampa Compressed natural gas (CNG). Www myfreetaxes com tampa Fuels used in commercial transportation on inland waterways. Www myfreetaxes com tampa Any liquid used in a fractional ownership program aircraft as fuel. Www myfreetaxes com tampa The following terms are used throughout the discussion of fuel taxes. Www myfreetaxes com tampa Other terms are defined in the discussion of the specific fuels to which they pertain. Www myfreetaxes com tampa Agri-biodiesel. Www myfreetaxes com tampa   Agri-biodiesel means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats. Www myfreetaxes com tampa Approved terminal or refinery. Www myfreetaxes com tampa   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. Www myfreetaxes com tampa Biodiesel. Www myfreetaxes com tampa   Biodiesel means the monoalkyl esters of long chain fatty acids derived from plant or animal matter that meet the registration requirements for fuels and fuel additives established by the Environmental Protection Agency (EPA) under section 211 of the Clean Air Act, and the requirements of the American Society of Testing Materials (ASTM) D6751. Www myfreetaxes com tampa Blended taxable fuel. Www myfreetaxes com tampa   This means any taxable fuel produced outside the bulk transfer/terminal system by mixing taxable fuel on which excise tax has been imposed and any other liquid on which excise tax has not been imposed. Www myfreetaxes com tampa This does not include a mixture removed or sold during the calendar quarter if all such mixtures removed or sold by the blender contain less than 400 gallons of a liquid on which the tax has not been imposed. Www myfreetaxes com tampa Blender. Www myfreetaxes com tampa   This is the person that produces blended taxable fuel. Www myfreetaxes com tampa Bulk transfer. Www myfreetaxes com tampa   This is the transfer of taxable fuel by pipeline or vessel. Www myfreetaxes com tampa Bulk transfer/terminal system. Www myfreetaxes com tampa   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Www myfreetaxes com tampa Fuel in the supply tank of any engine, or in any tank car, railcar, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system. Www myfreetaxes com tampa Cellulosic biofuel. Www myfreetaxes com tampa   Cellulosic biofuel means any liquid fuel produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis that meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act. Www myfreetaxes com tampa Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). Www myfreetaxes com tampa For fuels sold or used after December 31, 2009, cellulosic biofuel does not include fuel of which more than 4% (determined by weight) is any combination of water and sediment, fuel of which the ash content is more than 1%, or fuel that has an acid number greater than 25. Www myfreetaxes com tampa Also see Second generation biofuel below. Www myfreetaxes com tampa Diesel-water fuel emulsion. Www myfreetaxes com tampa   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. Www myfreetaxes com tampa The emulsion additive used to produce the fuel must be registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. Www myfreetaxes com tampa Dry lease aircraft exchange. Www myfreetaxes com tampa   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Www myfreetaxes com tampa Enterer. Www myfreetaxes com tampa   This is the importer of record (under customs law) for the taxable fuel. Www myfreetaxes com tampa However, if the importer of record is acting as an agent, such as a customs broker, the person for whom the agent is acting is the enterer. Www myfreetaxes com tampa If there is no importer of record, the owner at the time of entry into the United States is the enterer. Www myfreetaxes com tampa Entry. Www myfreetaxes com tampa   Taxable fuel is entered into the United States when it is brought into the United States and applicable customs law requires that it be entered for consumption, use, or warehousing. Www myfreetaxes com tampa This does not apply to fuel brought into Puerto Rico (which is part of the U. Www myfreetaxes com tampa S. Www myfreetaxes com tampa customs territory), but does apply to fuel brought into the United States from Puerto Rico. Www myfreetaxes com tampa Fractional ownership aircraft program and fractional program aircraft. Www myfreetaxes com tampa   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Www myfreetaxes com tampa Measurement of taxable fuel. Www myfreetaxes com tampa   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. Www myfreetaxes com tampa Other fuels. Www myfreetaxes com tampa   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. Www myfreetaxes com tampa Pipeline operator. Www myfreetaxes com tampa   This is the person that operates a pipeline within the bulk transfer/terminal system. Www myfreetaxes com tampa Position holder. Www myfreetaxes com tampa   This is the person that holds the inventory position in the taxable fuel in the terminal, as reflected in the records of the terminal operator. Www myfreetaxes com tampa You hold the inventory position when you have a contractual agreement with the terminal operator for the use of the storage facilities and terminaling services for the taxable fuel. Www myfreetaxes com tampa A terminal operator that owns taxable fuel in its terminal is a position holder. Www myfreetaxes com tampa Rack. Www myfreetaxes com tampa   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. Www myfreetaxes com tampa Refiner. Www myfreetaxes com tampa   This is any person that owns, operates, or otherwise controls a refinery. Www myfreetaxes com tampa Refinery. Www myfreetaxes com tampa   This is a facility used to produce taxable fuel and from which taxable fuel may be removed by pipeline, by vessel, or at a rack. Www myfreetaxes com tampa However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. Www myfreetaxes com tampa For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. Www myfreetaxes com tampa Registrant. Www myfreetaxes com tampa   This is a taxable fuel registrant (see Registration Requirements, later). Www myfreetaxes com tampa Removal. Www myfreetaxes com tampa   This is any physical transfer of taxable fuel. Www myfreetaxes com tampa It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. Www myfreetaxes com tampa However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. Www myfreetaxes com tampa Renewable diesel. Www myfreetaxes com tampa   See Renewable Diesel Credits in chapter 2. Www myfreetaxes com tampa Sale. Www myfreetaxes com tampa   For taxable fuel not in a terminal, this is the transfer of title to, or substantial incidents of ownership in, taxable fuel to the buyer for money, services, or other property. Www myfreetaxes com tampa For taxable fuel in a terminal, this is the transfer of the inventory position if the transferee becomes the position holder for that taxable fuel. Www myfreetaxes com tampa Second generation biofuel. Www myfreetaxes com tampa   This is any liquid fuel derived by, or from, qualified feedstocks, and meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U. Www myfreetaxes com tampa S. Www myfreetaxes com tampa C. Www myfreetaxes com tampa 7545). Www myfreetaxes com tampa It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. Www myfreetaxes com tampa It is not alcohol of less than 150 proof (disregard any added denaturants). Www myfreetaxes com tampa See Form 6478 for more information. Www myfreetaxes com tampa State. Www myfreetaxes com tampa   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. Www myfreetaxes com tampa An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. Www myfreetaxes com tampa Taxable fuel. Www myfreetaxes com tampa   This means gasoline, diesel fuel, and kerosene. Www myfreetaxes com tampa Terminal. Www myfreetaxes com tampa   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. Www myfreetaxes com tampa It does not include a facility at which gasoline blendstocks are used in the manufacture of products other than finished gasoline if no gasoline is removed from the facility. Www myfreetaxes com tampa A terminal does not include any facility where finished gasoline, diesel fuel, or kerosene is stored if the facility is operated by a registrant and all such taxable fuel stored at the facility has been previously taxed upon removal from a refinery or terminal. Www myfreetaxes com tampa Terminal operator. Www myfreetaxes com tampa   This is any person that owns, operates, or otherwise controls a terminal. Www myfreetaxes com tampa Throughputter. Www myfreetaxes com tampa   This is any person that is a position holder or that owns taxable fuel within the bulk transfer/terminal system (other than in a terminal). Www myfreetaxes com tampa Vessel operator. Www myfreetaxes com tampa   This is the person that operates a vessel within the bulk transfer/terminal system. Www myfreetaxes com tampa However, vessel does not include a deep draft ocean-going vessel. Www myfreetaxes com tampa Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. Www myfreetaxes com tampa A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. Www myfreetaxes com tampa For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. Www myfreetaxes com tampa The returns are due the last day of the month following the month in which the transaction occurs. Www myfreetaxes com tampa Generally, these returns can be filed on paper or electronically. Www myfreetaxes com tampa For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. Www myfreetaxes com tampa Publication 3536 is only available on the IRS website. Www myfreetaxes com tampa Form 720-TO. Www myfreetaxes com tampa   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. Www myfreetaxes com tampa Each terminal operator must file a separate form for each approved terminal. Www myfreetaxes com tampa Form 720-CS. Www myfreetaxes com tampa   This information return must be filed by bulk transport carriers (barges, vessels, and pipelines) who receive liquid product from an approved terminal or deliver liquid product to an approved terminal. Www myfreetaxes com tampa Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. Www myfreetaxes com tampa See Form 637 for other persons who must register and for more information about registration. Www myfreetaxes com tampa Persons that are required to be registered. Www myfreetaxes com tampa   You are required to be registered if you are a: Blender; Enterer; Pipeline operator; Position holder; Refiner; Terminal operator; Vessel operator; Producer or importer of alcohol, biodiesel, agri-biodiesel, and renewable diesel; or Producer of cellulosic or second generation biofuel. Www myfreetaxes com tampa Persons that may register. Www myfreetaxes com tampa   You may, but are not required to, register if you are a: Feedstock user, Industrial user, Throughputter that is not a position holder, Ultimate vendor, Diesel-water fuel emulsion producer, Credit card issuer, or Alternative fuel claimant. Www myfreetaxes com tampa Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. Www myfreetaxes com tampa However, they must be registered to file claims for certain sales and uses of fuel. Www myfreetaxes com tampa See Form 637 for more information. Www myfreetaxes com tampa Taxable fuel registrant. Www myfreetaxes com tampa   This is an enterer, an industrial user, a refiner, a terminal operator, or a throughputter who received a Letter of Registration under the excise tax registration provisions and whose registration has not been revoked or suspended. Www myfreetaxes com tampa The term registrant as used in the discussions of these fuels means a taxable fuel registrant. Www myfreetaxes com tampa Additional information. Www myfreetaxes com tampa   See the Form 637 instructions for the information you must submit when you apply for registration. Www myfreetaxes com tampa Failure to register. Www myfreetaxes com tampa   The penalty for failure to register if you must register, unless due to reasonable cause, is $10,000 for the initial failure, and then $1,000 each day thereafter you fail to register. Www myfreetaxes com tampa Gasoline and Aviation Gasoline Gasoline. Www myfreetaxes com tampa   Gasoline means all products commonly or commercially known or sold as gasoline with an octane rating of 75 or more that are suitable for use as a motor fuel. Www myfreetaxes com tampa Gasoline includes any gasoline blend other than: Qualified ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from coal, including peat), Partially exempt ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from natural gas), or Denatured alcohol. Www myfreetaxes com tampa Gasoline also includes gasoline blendstocks, discussed later. Www myfreetaxes com tampa Aviation gasoline. Www myfreetaxes com tampa   This means all special grades of gasoline suitable for use in aviation reciprocating engines and covered by ASTM specification D910 or military specification MIL-G-5572. Www myfreetaxes com tampa Taxable Events The tax on gasoline is $. Www myfreetaxes com tampa 184 per gallon. Www myfreetaxes com tampa The tax on aviation gasoline is $. Www myfreetaxes com tampa 194 per gallon. Www myfreetaxes com tampa When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. Www myfreetaxes com tampa 141 per gallon. Www myfreetaxes com tampa See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. Www myfreetaxes com tampa Tax is imposed on the removal, entry, or sale of gasoline. Www myfreetaxes com tampa Each of these events is discussed later. Www myfreetaxes com tampa Also, see the special rules that apply to gasoline blendstocks, later. Www myfreetaxes com tampa If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. Www myfreetaxes com tampa See Refunds of Second Tax in chapter 2. Www myfreetaxes com tampa Removal from terminal. Www myfreetaxes com tampa   All removals of gasoline at a terminal rack are taxable. Www myfreetaxes com tampa The position holder for that gasoline is liable for the tax. Www myfreetaxes com tampa Two-party exchanges. Www myfreetaxes com tampa   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. Www myfreetaxes com tampa A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. Www myfreetaxes com tampa The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. Www myfreetaxes com tampa The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. Www myfreetaxes com tampa The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. Www myfreetaxes com tampa The transaction is subject to a written contract. Www myfreetaxes com tampa Terminal operator's liability. Www myfreetaxes com tampa   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. Www myfreetaxes com tampa   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. Www myfreetaxes com tampa The terminal operator is a registrant. Www myfreetaxes com tampa The terminal operator has an unexpired notification certificate (discussed later) from the position holder. Www myfreetaxes com tampa The terminal operator has no reason to believe any information on the certificate is false. Www myfreetaxes com tampa Removal from refinery. Www myfreetaxes com tampa   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. Www myfreetaxes com tampa It is made by bulk transfer and the refiner, the owner of the gasoline immediately before the removal, or the operator of the pipeline or vessel is not a registrant. Www myfreetaxes com tampa It is made at the refinery rack. Www myfreetaxes com tampa The refiner is liable for the tax. Www myfreetaxes com tampa Exception. Www myfreetaxes com tampa   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. Www myfreetaxes com tampa The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Www myfreetaxes com tampa The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Www myfreetaxes com tampa The removal from the refinery is by railcar. Www myfreetaxes com tampa The same person operates the refinery and the facility at which the gasoline is received. Www myfreetaxes com tampa Entry into the United States. Www myfreetaxes com tampa   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. Www myfreetaxes com tampa It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Www myfreetaxes com tampa It is not made by bulk transfer. Www myfreetaxes com tampa The enterer is liable for the tax. Www myfreetaxes com tampa Importer of record's liability. Www myfreetaxes com tampa   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. Www myfreetaxes com tampa   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Www myfreetaxes com tampa The importer of record has an unexpired notification certificate (discussed later) from the enterer. Www myfreetaxes com tampa The importer of record has no reason to believe any information in the certificate is false. Www myfreetaxes com tampa Customs bond. Www myfreetaxes com tampa   The customs bond will not be charged for the tax imposed on the entry of the gasoline if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. Www myfreetaxes com tampa Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Www myfreetaxes com tampa   The removal by bulk transfer of gasoline from a terminal is taxable if the position holder for the gasoline or the operator of the pipeline or vessel is not a registrant. Www myfreetaxes com tampa The position holder is liable for the tax. Www myfreetaxes com tampa The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Www myfreetaxes com tampa However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Www myfreetaxes com tampa Bulk transfers not received at approved terminal or refinery. Www myfreetaxes com tampa   The removal by bulk transfer of gasoline from a terminal or refinery, or the entry of gasoline by bulk transfer into the United States, is taxable if the following conditions apply. Www myfreetaxes com tampa No tax was previously imposed (as discussed earlier) on any of the following events. Www myfreetaxes com tampa The removal from the refinery. Www myfreetaxes com tampa The entry into the United States. Www myfreetaxes com tampa The removal from a terminal by an unregistered position holder. Www myfreetaxes com tampa Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). Www myfreetaxes com tampa   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. Www myfreetaxes com tampa However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Www myfreetaxes com tampa The owner is a registrant. Www myfreetaxes com tampa The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. Www myfreetaxes com tampa The owner has no reason to believe any information on the certificate is false. Www myfreetaxes com tampa The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. Www myfreetaxes com tampa The operator is jointly and severally liable if the owner does not meet these conditions. Www myfreetaxes com tampa Sales to unregistered person. Www myfreetaxes com tampa   The sale of gasoline located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. Www myfreetaxes com tampa   The seller is liable for the tax. Www myfreetaxes com tampa However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Www myfreetaxes com tampa   The seller is a registrant. Www myfreetaxes com tampa The seller has an unexpired notification certificate (discussed later) from the buyer. Www myfreetaxes com tampa The seller has no reason to believe any information on the certificate is false. Www myfreetaxes com tampa The buyer of the gasoline is liable for the tax if the seller meets these conditions. Www myfreetaxes com tampa The buyer is jointly and severally liable if the seller does not meet these conditions. Www myfreetaxes com tampa Exception. Www myfreetaxes com tampa   The tax does not apply to a sale if all of the following apply. Www myfreetaxes com tampa The buyer's principal place of business is not in the United States. Www myfreetaxes com tampa The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Www myfreetaxes com tampa The seller is a registrant and the exporter of record. Www myfreetaxes com tampa The fuel was exported. Www myfreetaxes com tampa Removal or sale of blended gasoline. Www myfreetaxes com tampa   The removal or sale of blended gasoline by the blender is taxable. Www myfreetaxes com tampa See Blended taxable fuel under Definitions, earlier. Www myfreetaxes com tampa   The blender is liable for the tax. Www myfreetaxes com tampa The tax is figured on the number of gallons not previously subject to the tax on gasoline. Www myfreetaxes com tampa   Persons who blend alcohol with gasoline to produce an alcohol fuel mixture outside the bulk transfer/terminal system must pay the gasoline tax on the volume of alcohol in the mixture. Www myfreetaxes com tampa See Form 720 to report this tax. Www myfreetaxes com tampa You also must be registered with the IRS as a blender. Www myfreetaxes com tampa See Form 637. Www myfreetaxes com tampa   However, if an untaxed liquid is sold as taxed taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. Www myfreetaxes com tampa Notification certificate. Www myfreetaxes com tampa   The notification certificate is used to notify a person of the registration status of the registrant. Www myfreetaxes com tampa A copy of the registrant's letter of registration cannot be used as a notification certificate. Www myfreetaxes com tampa A model notification certificate is shown in the Appendix as Model Certificate C. Www myfreetaxes com tampa A notification certificate must contain all information necessary to complete the model. Www myfreetaxes com tampa   The certificate may be included as part of any business records normally used for a sale. Www myfreetaxes com tampa A certificate expires on the earlier of the date the registrant provides a new certificate, or the date the recipient of the certificate is notified that the registrant's registration has been revoked or suspended. Www myfreetaxes com tampa The registrant must provide a new certificate if any information on a certificate has changed. Www myfreetaxes com tampa Additional persons liable. Www myfreetaxes com tampa   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax is imposed on: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty, or Anyone who willfully causes the person to fail to pay the tax. Www myfreetaxes com tampa Gasoline Blendstocks Gasoline blendstocks may be subject to $. Www myfreetaxes com tampa 001 per gallon LUST tax as discussed below. Www myfreetaxes com tampa Gasoline includes gasoline blendstocks. Www myfreetaxes com tampa The previous discussions apply to these blendstocks. Www myfreetaxes com tampa However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. Www myfreetaxes com tampa 001 per gallon or are not subject to the excise tax. Www myfreetaxes com tampa Blendstocks. Www myfreetaxes com tampa   Gasoline blendstocks are: Alkylate, Butane, Butene, Catalytically cracked gasoline, Coker gasoline, Ethyl tertiary butyl ether (ETBE), Hexane, Hydrocrackate, Isomerate, Methyl tertiary butyl ether (MTBE), Mixed xylene (not including any separated isomer of xylene), Natural gasoline, Pentane, Pentane mixture, Polymer gasoline, Raffinate, Reformate, Straight-run gasoline, Straight-run naphtha, Tertiary amyl methyl ether (TAME), Tertiary butyl alcohol (gasoline grade) (TBA), Thermally cracked gasoline, and Toluene. Www myfreetaxes com tampa   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. Www myfreetaxes com tampa Not used to produce finished gasoline. Www myfreetaxes com tampa   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. Www myfreetaxes com tampa Removals and entries not connected to sale. Www myfreetaxes com tampa   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. Www myfreetaxes com tampa Removals and entries connected to sale. Www myfreetaxes com tampa   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant, and at the time of the sale, meets the following requirements. Www myfreetaxes com tampa The person has an unexpired certificate (discussed later) from the buyer. Www myfreetaxes com tampa The person has no reason to believe any information in the certificate is false. Www myfreetaxes com tampa Sales after removal or entry. Www myfreetaxes com tampa   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. Www myfreetaxes com tampa The seller is liable for the tax. Www myfreetaxes com tampa However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. Www myfreetaxes com tampa The seller has an unexpired certificate (discussed next) from the buyer. Www myfreetaxes com tampa The seller has no reason to believe any information in the certificate is false. Www myfreetaxes com tampa Certificate of buyer. Www myfreetaxes com tampa   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. Www myfreetaxes com tampa The certificate may be included as part of any business records normally used for a sale. Www myfreetaxes com tampa A model certificate is shown in the Appendix as Model Certificate D. Www myfreetaxes com tampa The certificate must contain all information necessary to complete the model. Www myfreetaxes com tampa   A certificate expires on the earliest of the following dates. Www myfreetaxes com tampa The date 1 year after the effective date (not earlier than the date signed) of the certificate. Www myfreetaxes com tampa The date a new certificate is provided to the seller. Www myfreetaxes com tampa The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. Www myfreetaxes com tampa The buyer must provide a new certificate if any information on a certificate has changed. Www myfreetaxes com tampa   The IRS may withdraw the buyer's right to provide a certificate if that buyer uses the gasoline blendstocks in the production of finished gasoline or resells the blendstocks without getting a certificate from its buyer. Www myfreetaxes com tampa Received at approved terminal or refinery. Www myfreetaxes com tampa   The nonbulk removal or entry of gasoline blendstocks received at an approved terminal or refinery is not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) meets all the following requirements. Www myfreetaxes com tampa The person is a registrant. Www myfreetaxes com tampa The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. Www myfreetaxes com tampa The person has no reason to believe any information on the certificate is false. Www myfreetaxes com tampa Bulk transfers to registered industrial user. Www myfreetaxes com tampa   The removal of gasoline blendstocks from a pipeline or vessel is not taxable (other than LUST) if the blendstocks are received by a registrant that is an industrial user. Www myfreetaxes com tampa An industrial user is any person that receives gasoline blendstocks by bulk transfer for its own use in the manufacture of any product other than finished gasoline. Www myfreetaxes com tampa Credits or Refunds. Www myfreetaxes com tampa   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. Www myfreetaxes com tampa For more information, see chapter 2. Www myfreetaxes com tampa Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). Www myfreetaxes com tampa However, special rules (discussed later) apply to dyed diesel fuel and dyed kerosene, and to undyed diesel fuel and undyed kerosene sold or used in Alaska for certain nontaxable uses and undyed kerosene used for a feedstock purpose. Www myfreetaxes com tampa Diesel fuel means: Any liquid that without further processing or blending is suitable for use as a fuel in a diesel-powered highway vehicle or train, and Transmix. Www myfreetaxes com tampa A liquid is suitable for this use if the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. Www myfreetaxes com tampa A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. Www myfreetaxes com tampa However, a liquid does not possess this practical and commercial fitness solely by reason of its possible or rare use as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. Www myfreetaxes com tampa Diesel fuel does not include gasoline, kerosene, excluded liquid, No. Www myfreetaxes com tampa 5 and No. Www myfreetaxes com tampa 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. Www myfreetaxes com tampa An excluded liquid is either of the following. Www myfreetaxes com tampa A liquid that contains less than 4% normal paraffins. Www myfreetaxes com tampa A liquid with all the following properties. Www myfreetaxes com tampa Distillation range of 125 degrees Fahrenheit or less. Www myfreetaxes com tampa Sulfur content of 10 ppm or less. Www myfreetaxes com tampa Minimum color of +27 Saybolt. Www myfreetaxes com tampa Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. Www myfreetaxes com tampa Kerosene. Www myfreetaxes com tampa   This means any of the following liquids. Www myfreetaxes com tampa One of the two grades of kerosene (No. Www myfreetaxes com tampa 1-K and No. Www myfreetaxes com tampa 2-K) covered by ASTM specification D3699. Www myfreetaxes com tampa Kerosene-type jet fuel covered by ASTM specification D1655 or military specification MIL-DTL-5624T (Grade JP-5) or MIL-DTL-83133E (Grade JP-8). Www myfreetaxes com tampa See Kerosene for Use in Aviation, later. Www myfreetaxes com tampa   However, kerosene does not include excluded liquid, discussed earlier. Www myfreetaxes com tampa   Kerosene also includes any liquid that would be described above but for the presence of a dye of the type used to dye kerosene for a nontaxable use. Www myfreetaxes com tampa Diesel-powered highway vehicle. Www myfreetaxes com tampa   This is any self-propelled vehicle designed to carry a load over public highways (whether or not also designed to perform other functions) and propelled by a diesel-powered engine. Www myfreetaxes com tampa Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. Www myfreetaxes com tampa For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. Www myfreetaxes com tampa 2) in chapter 2. Www myfreetaxes com tampa Diesel-powered train. Www myfreetaxes com tampa   This is any diesel-powered equipment or machinery that rides on rails. Www myfreetaxes com tampa The term includes a locomotive, work train, switching engine, and track maintenance machine. Www myfreetaxes com tampa Taxable Events The tax on diesel fuel and kerosene is $. Www myfreetaxes com tampa 244 per gallon. Www myfreetaxes com tampa It is imposed on the removal, entry, or sale of diesel fuel and kerosene. Www myfreetaxes com tampa Each of these events is discussed later. Www myfreetaxes com tampa Only the $. Www myfreetaxes com tampa 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. Www myfreetaxes com tampa If the tax is paid on the diesel fuel or kerosene in more than one event, a refund may be allowed for the “second” tax paid. Www myfreetaxes com tampa See Refunds of Second Tax in chapter 2. Www myfreetaxes com tampa Use in certain intercity and local buses. Www myfreetaxes com tampa   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. Www myfreetaxes com tampa A claim for $. Www myfreetaxes com tampa 17 per gallon may be made by the registered ultimate vendor (under certain conditions) or the ultimate purchaser for undyed diesel fuel or undyed kerosene sold for use in certain intercity or local buses. Www myfreetaxes com tampa An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Www myfreetaxes com tampa The bus must be engaged in one of the following activities. Www myfreetaxes com tampa Scheduled transportation along regular routes regardless of the size of the bus. Www myfreetaxes com tampa Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). Www myfreetaxes com tampa A bus is available to the general public if the bus is available for hire to more than a limited number of persons, groups, or organizations. Www myfreetaxes com tampa Removal from terminal. Www myfreetaxes com tampa   All removals of diesel fuel and kerosene at a terminal rack are taxable. Www myfreetaxes com tampa The position holder for that fuel is liable for the tax. Www myfreetaxes com tampa Two-party exchanges. Www myfreetaxes com tampa   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. Www myfreetaxes com tampa A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. Www myfreetaxes com tampa The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. Www myfreetaxes com tampa The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. Www myfreetaxes com tampa The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. Www myfreetaxes com tampa The transaction is subject to a written contract. Www myfreetaxes com tampa Terminal operator's liability. Www myfreetaxes com tampa   The terminal operator is jointly and severally liable for the tax if the terminal operator provides any person with any bill of lading, shipping paper, or similar document indicating that diesel fuel or kerosene is dyed (discussed later). Www myfreetaxes com tampa   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. Www myfreetaxes com tampa However, a terminal operator will not be liable for the tax in this situation if, at the time of the removal, the following conditions are met. Www myfreetaxes com tampa The terminal operator is a registrant. Www myfreetaxes com tampa The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. Www myfreetaxes com tampa The terminal operator has no reason to believe any information on the certificate is false. Www myfreetaxes com tampa Removal from refinery. Www myfreetaxes com tampa   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. Www myfreetaxes com tampa It is made by bulk transfer and the refiner, the owner of the fuel immediately before the removal, or the operator of the pipeline or vessel is not a registrant. Www myfreetaxes com tampa It is made at the refinery rack. Www myfreetaxes com tampa The refiner is liable for the tax. Www myfreetaxes com tampa Exception. Www myfreetaxes com tampa   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. Www myfreetaxes com tampa The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Www myfreetaxes com tampa The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Www myfreetaxes com tampa The removal from the refinery is by: Railcar and the same person operates the refinery and the facility at which the diesel fuel or kerosene is received, or For diesel fuel only, a trailer or semi-trailer used exclusively to transport the diesel fuel from a refinery (described in (1)) to a facility (described in (2)) less than 20 miles from the refinery. Www myfreetaxes com tampa Entry into the United States. Www myfreetaxes com tampa   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. Www myfreetaxes com tampa It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Www myfreetaxes com tampa It is not made by bulk transfer. Www myfreetaxes com tampa The enterer is liable for the tax. Www myfreetaxes com tampa Importer of record's liability. Www myfreetaxes com tampa   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. Www myfreetaxes com tampa   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Www myfreetaxes com tampa The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. Www myfreetaxes com tampa The importer of record has no reason to believe any information in the certificate is false. Www myfreetaxes com tampa Customs bond. Www myfreetaxes com tampa   The customs bond will not be charged for the tax imposed on the entry of the diesel fuel or kerosene if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. Www myfreetaxes com tampa Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Www myfreetaxes com tampa   The removal by bulk transfer of diesel fuel or kerosene from a terminal is taxable if the position holder for that fuel or the operator of the pipeline or vessel is not a registrant. Www myfreetaxes com tampa The position holder is liable for the tax. Www myfreetaxes com tampa The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Www myfreetaxes com tampa However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Www myfreetaxes com tampa Bulk transfers not received at approved terminal or refinery. Www myfreetaxes com tampa   The removal by bulk transfer of diesel fuel or kerosene from a terminal or refinery or the entry of diesel fuel or kerosene by bulk transfer into the United States is taxable if the following conditions apply. Www myfreetaxes com tampa No tax was previously imposed (as discussed earlier) on any of the following events. Www myfreetaxes com tampa The removal from the refinery. Www myfreetaxes com tampa The entry into the United States. Www myfreetaxes com tampa The removal from a terminal by an unregistered position holder. Www myfreetaxes com tampa Upon removal from the pipeline or vessel, the diesel fuel or kerosene is not received at an approved terminal or refinery (or at another pipeline or vessel). Www myfreetaxes com tampa   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. Www myfreetaxes com tampa However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Www myfreetaxes com tampa The owner is a registrant. Www myfreetaxes com tampa The owner has an unexpired notification certificate (discussed under Gasoline) from the operator of the terminal or refinery where the diesel fuel or kerosene is received. Www myfreetaxes com tampa The owner has no reason to believe any information on the certificate is false. Www myfreetaxes com tampa The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. Www myfreetaxes com tampa The operator is jointly and severally liable if the owner does not meet these conditions. Www myfreetaxes com tampa Sales to unregistered person. Www myfreetaxes com tampa   The sale of diesel fuel or kerosene located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. Www myfreetaxes com tampa   The seller is liable for the tax. Www myfreetaxes com tampa However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Www myfreetaxes com tampa The seller is a registrant. Www myfreetaxes com tampa The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. Www myfreetaxes com tampa The seller has no reason to believe any information on the certificate is false. Www myfreetaxes com tampa The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. Www myfreetaxes com tampa The buyer is jointly and severally liable if the seller does not meet these conditions. Www myfreetaxes com tampa Exception. Www myfreetaxes com tampa   The tax does not apply to a sale if all of the following apply. Www myfreetaxes com tampa The buyer's principal place of business is not in the United States. Www myfreetaxes com tampa The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Www myfreetaxes com tampa The seller is a registrant and the exporter of record. Www myfreetaxes com tampa The fuel was exported. Www myfreetaxes com tampa Removal or sale of blended diesel fuel or kerosene. Www myfreetaxes com tampa   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. Www myfreetaxes com tampa Blended taxable fuel produced using biodiesel is subject to the tax. Www myfreetaxes com tampa See Blended taxable fuel under Definitions, earlier. Www myfreetaxes com tampa   The blender is liable for the tax. Www myfreetaxes com tampa The tax is figured on the number of gallons not previously subject to the tax. Www myfreetaxes com tampa   Persons who blend biodiesel with undyed diesel fuel to produce and sell or use a biodiesel mixture outside the bulk transfer/terminal system must pay the diesel fuel tax on the volume of biodiesel in the mixture. Www myfreetaxes com tampa Generally, the biodiesel mixture must be diesel fuel (defined earlier). Www myfreetaxes com tampa See Form 720 to report this tax. Www myfreetaxes com tampa You also must be registered by the IRS as a blender. Www myfreetaxes com tampa See Form 637 for more information. Www myfreetaxes com tampa   However, if an untaxed liquid is sold as taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. Www myfreetaxes com tampa Additional persons liable. Www myfreetaxes com tampa   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax applies to: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty; or Anyone who willfully causes the person to fail to pay the tax. Www myfreetaxes com tampa Credits or Refunds. Www myfreetaxes com tampa   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. Www myfreetaxes com tampa For more information, see chapter 2. Www myfreetaxes com tampa Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. Www myfreetaxes com tampa 001 per gallon LUST tax as discussed below, unless the fuel is for export. Www myfreetaxes com tampa The excise tax is not imposed on the removal, entry, or sale of diesel fuel or kerosene (other than the LUST tax) if all the following tests are met. Www myfreetaxes com tampa The person otherwise liable for tax (for example, the position holder) is a registrant. Www myfreetaxes com tampa In the case of a removal from a terminal, the terminal is an approved terminal. Www myfreetaxes com tampa The diesel fuel or kerosene satisfies the dyeing requirements (described next). Www myfreetaxes com tampa Dyeing requirements. Www myfreetaxes com tampa   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. Www myfreetaxes com tampa It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. Www myfreetaxes com tampa 9 pounds of the solid dye standard Solvent Red 26 per thousand barrels of fuel or any dye of a type and in a concentration that has been approved by the Commissioner. Www myfreetaxes com tampa Is indelibly dyed by mechanical injection. Www myfreetaxes com tampa See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. Www myfreetaxes com tampa Notice required. Www myfreetaxes com tampa   A legible and conspicuous notice stating either: DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE or DYED KEROSENE, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE must be: Provided by the terminal operator to any person that receives dyed diesel fuel or dyed kerosene at a terminal rack of that operator, and Posted by a seller on any retail pump or other delivery facility where it sells dyed diesel fuel or dyed kerosene for use by its buyer. Www myfreetaxes com tampa   The notice under item (1) must be provided by the time of the removal and must appear on all shipping papers, bills of lading, and similar documents accompanying the removal of the fuel. Www myfreetaxes com tampa   Any seller that fails to post the required notice under item (2) is presumed to know that the fuel will be used for a taxable use (a use other than a nontaxable use listed later). Www myfreetaxes com tampa That seller is subject to the penalty described next. Www myfreetaxes com tampa Penalty. Www myfreetaxes com tampa   A penalty is imposed on a person if any of the following situations apply. Www myfreetaxes com tampa Any dyed fuel is sold or held for sale by the person for a use the person knows or has reason to know is not a nontaxable use of the fuel. Www myfreetaxes com tampa Any dyed fuel is held for use or used by the person for a use other than a nontaxable use and the person knew, or had reason to know, that the fuel was dyed. Www myfreetaxes com tampa The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. Www myfreetaxes com tampa The person has knowledge that a dyed fuel that has been altered, as described in (3) above, sells or holds for sale such fuel for any use for which the person knows or has reason to know is not a nontaxable use of the fuel. Www myfreetaxes com tampa   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Www myfreetaxes com tampa After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Www myfreetaxes com tampa   This penalty is in addition to any tax imposed on the fuel. Www myfreetaxes com tampa   If the penalty is imposed, each officer, employee, or agent of a business entity who willfully participated in any act giving rise to the penalty is jointly and severally liable with that entity for the penalty. Www myfreetaxes com tampa   There is no administrative appeal or review allowed for the third and subsequent penalty imposed by section 6715 on any person except for: Fraud or a mistake in the chemical analysis, or Mathematical calculation of the penalty. Www myfreetaxes com tampa   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. Www myfreetaxes com tampa However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. Www myfreetaxes com tampa The penalty may apply if the fuel is held for sale or use for a taxable use while the back-up tax does not apply unless the fuel is delivered into a fuel supply tank. Www myfreetaxes com tampa Exception to penalty. Www myfreetaxes com tampa   The penalty under item (3) will not apply in any of the following situations. Www myfreetaxes com tampa Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. Www myfreetaxes com tampa Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any other liquid (other than diesel fuel or kerosene) that contains the type and amount of dye required to meet the dyeing requirements. Www myfreetaxes com tampa The alteration or attempted alteration occurs in an exempt area of Alaska. Www myfreetaxes com tampa See Removal for sale or use in Alaska, later. Www myfreetaxes com tampa Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with diesel fuel or kerosene not meeting the dyeing requirements and the blending occurs as part of a nontaxable use (other than export), discussed later. Www myfreetaxes com tampa Alaska and Feedstocks Tax of $. Www myfreetaxes com tampa 001 per gallon is imposed on: Undyed diesel fuel or undyed kerosene sold or used in Alaska for certain nontaxable uses (see Later sales on page 10). Www myfreetaxes com tampa Undyed kerosene used for feedstock purposes. Www myfreetaxes com tampa Removal for sale or use in Alaska. Www myfreetaxes com tampa   No tax is imposed on the removal, entry, or sale of diesel fuel or kerosene in Alaska for ultimate sale or use in certain areas of Alaska for certain nontaxable uses. Www myfreetaxes com tampa The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. Www myfreetaxes com tampa The person otherwise liable for the tax (position holder, refiner, or enterer): Is a registrant, Can show satisfactory evidence of the nontaxable nature of the transaction, and Has no reason to believe the evidence is false. Www myfreetaxes com tampa In the case of a removal from a terminal, the terminal is an approved terminal. Www myfreetaxes com tampa The owner of the fuel immediately after the removal or entry holds the fuel for its own use in a nontaxable use (discussed later) or is a qualified dealer. Www myfreetaxes com tampa   If all three of the requirements above are not met, then tax is imposed at $. Www myfreetaxes com tampa 244 per gallon. Www myfreetaxes com tampa   A qualified dealer is any person that holds a qualified dealer license from the state of Alaska or has been registered by the IRS as a qualified retailer. Www myfreetaxes com tampa Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. Www myfreetaxes com tampa Later sales. Www myfreetaxes com tampa   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. Www myfreetaxes com tampa The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. Www myfreetaxes com tampa However, the sale is not taxable (other than the LUST tax at $. Www myfreetaxes com tampa 001 per gallon) if all the following requirements are met. Www myfreetaxes com tampa The fuel is sold in Alaska for certain nontaxable uses. Www myfreetaxes com tampa The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. Www myfreetaxes com tampa The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. Www myfreetaxes com tampa Feedstock purposes. Www myfreetaxes com tampa   The $. Www myfreetaxes com tampa 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. Www myfreetaxes com tampa The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. Www myfreetaxes com tampa In the case of a removal from a terminal, the terminal is an approved terminal. Www myfreetaxes com tampa Either: The person otherwise liable for tax uses the kerosene for a feedstock purpose, or The kerosene is sold for use by the buyer for a feedstock purpose and, at the time of the sale, the person otherwise liable for tax has an unexpired certificate (described later) from the buyer and has no reason to believe any information on the certificate is false. Www myfreetaxes com tampa   If all of the requirements above are not met, then tax is imposed at $. Www myfreetaxes com tampa 244 per gallon. Www myfreetaxes com tampa   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. Www myfreetaxes com tampa For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. Www myfreetaxes com tampa A feedstock user is a person that uses kerosene for a feedstock purpose. Www myfreetaxes com tampa A registered feedstock user is a person that has been registered by the IRS as a feedstock user. Www myfreetaxes com tampa See Registration Requirements, earlier. Www myfreetaxes com tampa Later sales. Www myfreetaxes com tampa   The excise tax ($. Www myfreetaxes com tampa 244 per gallon) applies to kerosene sold for use by the buyer for a feedstock purpose (item (3)(b) above) if the buyer in that sale later sells the kerosene. Www myfreetaxes com tampa The tax is imposed at the time of the later sale and that seller is liable for the tax. Www myfreetaxes com tampa Certificate. Www myfreetaxes com tampa   The certificate from the buyer certifies the buyer is a registered feedstock user and the kerosene will be used by the buyer for a feedstock purpose. Www myfreetaxes com tampa The certificate may be included as part of any business records normally used for a sale. Www myfreetaxes com tampa A model certificate is shown in the Appendix as Model Certificate G. Www myfreetaxes com tampa Your certificate must contain all information necessary to complete the model. Www myfreetaxes com tampa   A certificate expires on the earliest of the following dates. Www myfreetaxes com tampa The date 1 year after the effective date (not earlier than the date signed) of the certificate. Www myfreetaxes com tampa The date the seller is provided a new certificate or notice that the current certificate is invalid. Www myfreetaxes com tampa The date the seller is notified the buyer's registration has been revoked or suspended. Www myfreetaxes com tampa   The buyer must provide a new certificate if any information on a certificate has changed. Www myfreetaxes com tampa Back-up Tax Tax is imposed on the delivery of any of the following into the fuel supply tank of a diesel-powered highway vehicle. Www myfreetaxes com tampa Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. Www myfreetaxes com tampa Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. Www myfreetaxes com tampa Any liquid other than gasoline, diesel fuel, or kerosene. Www myfreetaxes com tampa Generally, this back-up tax is imposed at a rate of $. Www myfreetaxes com tampa 244 per gallon. Www myfreetaxes com tampa Liability for tax. Www myfreetaxes com tampa   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. Www myfreetaxes com tampa In addition, the seller of the diesel fuel or kerosene is jointly and severally liable for the tax if the seller knows or has reason to know that the fuel will be used for other than a nontaxable use. Www myfreetaxes com tampa Exemptions from the back-up tax. Www myfreetaxes com tampa   The back-up tax does not apply to a delivery of diesel fuel or kerosene for uses 1, 2, 6, 7, 12, 13, 14, and 15 listed under Definitions of Nontaxable Uses in chapter 2. Www myfreetaxes com tampa   In addition, since the back-up tax is imposed only on the delivery into the fuel supply tank of a diesel-powered vehicle or train, the tax does not apply to diesel fuel or kerosene used as heating oil or in stationary engines. Www myfreetaxes com tampa Diesel-Water Fuel Emulsion Diesel-water fuel emulsion means diesel fuel at least 14% of which is water and for which 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. Www myfreetaxes com tampa A reduced tax rate of $. Www myfreetaxes com tampa 198 per gallon is imposed on a diesel-water fuel emulsion. Www myfreetaxes com tampa To be eligible for the reduced rate, the person who sells, removes, or uses the diesel-water fuel emulsion must be registered by the IRS. Www myfreetaxes com tampa If the diesel-water fuel emulsion does not meet the requirements above, or if the person who sells, removes, or uses the fuel is not registered, the diesel-water fuel emulsion is taxed at $. Www myfreetaxes com tampa 244 per gallon. Www myfreetaxes com tampa Credits or refunds. Www myfreetaxes com tampa   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. Www myfreetaxes com tampa Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. Www myfreetaxes com tampa 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). Www myfreetaxes com tampa For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. Www myfreetaxes com tampa 219. Www myfreetaxes com tampa The rate of $. Www myfreetaxes com tampa 219 also applies if kerosene is removed into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene from a terminal that is located within an airport. Www myfreetaxes com tampa The airport terminal does not need to be a secured airport terminal for this rate to apply. Www myfreetaxes com tampa However, the refueler truck, tanker, or tank wagon must meet the requirements discussed under Certain refueler trucks, tankers, and tank wagons, treated as terminals, later. Www myfreetaxes com tampa For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. Www myfreetaxes com tampa 044 per gallon. Www myfreetaxes com tampa For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. Www myfreetaxes com tampa 044 rate applies only if the truck, tanker, or tank wagon is loaded at a terminal that is located in a secured area of the airport. Www myfreetaxes com tampa See Terminal located within a secured area of an airport, later. Www myfreetaxes com tampa In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Www myfreetaxes com tampa For kerosene removed directly into the fuel tank of an aircraft for a use exempt from tax under section 4041(c) (such as use in an aircraft for the exclusive use of a state or local government), the rate of tax is $. Www myfreetaxes com tampa 001. Www myfreetaxes com tampa There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Www myfreetaxes com tampa The kerosene must be removed from a qualifying refueler truck, tanker, or tank wagon loaded at a terminal located within a secured area of an airport. Www myfreetaxes com tampa See Terminal located within a secured area of an airport, later. Www myfreetaxes com tampa In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Www myfreetaxes com tampa The position holder is liable for the $. Www myfreetaxes com tampa 001 per gallon tax. Www myfreetaxes com tampa For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. Www myfreetaxes com tampa 141 per gallon applies. Www myfreetaxes com tampa Certain refueler trucks, tankers, and tank wagons treated as terminals. Www myfreetaxes com tampa   For purposes of the tax imposed on kerosene for use in aviation removed directly into the fuel tank of an aircraft for use in commercial aviation, certain refueler trucks, tankers, and tank wagons are treated as part of a terminal if the following conditions are met. Www myfreetaxes com tampa Such terminal is located within an area of an airport. Www myfreetaxes com tampa Any kerosene for use in aviation that is loaded in a refueler truck, tanker, or tank wagon at a terminal is for delivery into aircraft at the airport in which the terminal is located. Www myfreetaxes com tampa Except in exigent circumstances, such as those identified in Notice 2005-80, no vehicle registered for highway use is loaded with kerosene for use in aviation at the terminal. Www myfreetaxes com tampa The refueler truck, tanker, or tank wagon meets the following requirements: Has storage tanks, hose, and coupling equipment designed and used for fueling aircraft, Is not registered for highway use, and Is operated by the terminal operator or a person that makes a daily accounting to the terminal operator of each delivery of fuel from the refueler truck, tanker, or tank wagon. Www myfreetaxes com tampa Information reporting will be required by terminal operators regarding this provision. Www myfreetaxes com tampa Until the format of this information reporting is issued, taxpayers are required to retain records regarding the daily accounting, but are not required to report such information. Www myfreetaxes com tampa Terminal located within a secured area of an airport. Www myfreetaxes com tampa   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. Www myfreetaxes com tampa This list refers to fueling operations at airport terminals as it applies to the federal excise tax on kerosene for use in aviation, and has nothing to do with the general security of airports either included or not included in the list. Www myfreetaxes com tampa Liability For Tax If the kerosene is removed directly into the fuel tank of an aircraft for use in commercial aviation, the operator of the aircraft in commercial aviation is liable for the tax on the removal at the rate of $. Www myfreetaxes com tampa 044 per gallon. Www myfreetaxes com tampa However, the position holder is liable for the LUST tax for kerosene for use in aviation removed directly into the fuel tank of an aircraft for use exempt from tax under section 4041(c) (except foreign trade). Www myfreetaxes com tampa For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. Www myfreetaxes com tampa For the aircraft operator to be liable for the tax $. Www myfreetaxes com tampa 044 rate, the position holder must meet the following requirements: Is a taxable fuel registrant, Has an unexpired certificate (a model certificate is shown in the Appendix as Model Certificate K) from the operator of the aircraft, and Has no reason to believe any of the information in the certificate is false. Www myfreetaxes com tampa Commercial aviation. Www myfreetaxes com tampa   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. Www myfreetaxes com tampa However, commercial aviation does not include any of the following uses. Www myfreetaxes com tampa Any use exclusively for the purpose of skydiving. Www myfreetaxes com tampa Certain air transportation by seaplane. Www myfreetaxes com tampa See Seaplanes under Transportation of Persons by Air in chapter 4. Www myfreetaxes com tampa Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. Www myfreetaxes com tampa For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. Www myfreetaxes com tampa Any use of an aircraft that has a maximum certificated takeoff weight of 6,000 pounds or less, unless the aircraft is operated on an established line. Www myfreetaxes com tampa For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. Www myfreetaxes com tampa Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. Www myfreetaxes com tampa See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. Www myfreetaxes com tampa Surtax on any liquid used in a fractional ownership program aircraft as fuel Fuel used in a fractional ownership program aircraft (as defined below) after March 31, 2012, is subject to a surtax of $. Www myfreetaxes com tampa 141 per gallon. Www myfreetaxes com tampa The fractional ownership program manager is liable for the tax. Www myfreetaxes com tampa The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. Www myfreetaxes com tampa If the surtax is imposed, the following air transportation taxes do not apply. Www myfreetaxes com tampa Transportation of persons by air. Www myfreetaxes com tampa Transportation of property by air. Www myfreetaxes com tampa Use of international air travel facilities. Www myfreetaxes com tampa These taxes are described under Air Transportation Taxes, later. Www myfreetaxes com tampa A fractional ownership program aircraft flight is considered noncommercial aviation, for the rules for kerosene used in noncommercial aviation, see Kerosene for Use in Aviation above. Www myfreetaxes com tampa Fractional ownership aircraft program    is a program under which:  A single fractional ownership program manager provides fractional ownership program management services on behalf of the fractional owners; There are one or more fractional owners per fractional program aircraft, with at least one fractional program aircraft having more than one owner; For at least two fractional program aircraft, none of the ownership interests in the aircraft are less than the minimum fractional ownership interest or held by the program manager; There exists a dry-lease aircraft exchange arrangement among all of the fractional owners; and There are multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program. Www myfreetaxes com tampa Fractional program aircraft. Www myfreetaxes com tampa   Any aircraft that, in any fractional ownership aircraft program, is listed as a fractional program aircraft in the management specifications issued to the manager of such program by Federal Aviation Administration under subpart K of part 91 title 14, Code of Federal Regulations, and is registered in the U. Www myfreetaxes com tampa S. Www myfreetaxes com tampa   Fractional program aircraft are not considered used for transportation of a qualified fractional owner, or on account of such qualified fractional owner when they are used for flight demonstration, maintenance or crew training. Www myfreetaxes com tampa In such situations, the flight is not commercial aviation. Www myfreetaxes com tampa Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. Www myfreetaxes com tampa Fractional owner. Www myfreetaxes com tampa   Any person owning any interest (including the entire interest) in a fractional program aircraft. Www myfreetaxes com tampa Dry lease aircraft exchange. Www myfreetaxes com tampa   An agreement, documented by the written program agreements, under which the fractional program aircraft are available, on an as-needed basis without crew, to each fractional owner. Www myfreetaxes com tampa Special rule relating to deadhead service. Www myfreetaxes com tampa   A fractional program aircraft will not be considered to be used on account of a qualified fractional owner when it is used in deadhead service and a person other than a qualified fractional owner is separately charged for such service. Www myfreetaxes com tampa More information. Www myfreetaxes com tampa   See section 4043 for more information on the surtax. Www myfreetaxes com tampa Certificate for Commercial Aviation and Exempt Uses A certificate is required from the aircraft operator: To support aircraft operator liability for tax on removal of kerosene for use in aviation directly into the fuel tank of an aircraft in commercial aviation, or For exempt uses. Www myfreetaxes com tampa Certificate. Www myfreetaxes com tampa   The certificate may be included as part of any business records normally used for a sale. Www myfreetaxes com tampa See Model Certificate K in the Appendix. Www myfreetaxes com tampa   A certificate expires on the earliest of the following dates. Www myfreetaxes com tampa The date 1 year after the effective date (not earlier than the date signed) of the certificate. Www myfreetaxes com tampa The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. Www myfreetaxes com tampa The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. Www myfreetaxes com tampa   The buyer must provide a new certificate if any information on a certificate has changed. Www myfreetaxes com tampa   The IRS may withdraw the buyer's right to provide a certificate if the buyer uses the kerosene for use in aviation to which a certificate relates other than as stated in the certificate. Www myfreetaxes com tampa Exempt use. Www myfreetaxes com tampa   The rate on kerosene for use in aviation is $. Www myfreetaxes com tampa 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. Www myfreetaxes com tampa An exempt use includes kerosene for the exclusive use of a state or local government. Www myfreetaxes com tampa There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Www myfreetaxes com tampa Flash title transaction. Www myfreetaxes com tampa   A position holder is not liable for tax if, among other conditions, it obtains a certificate (described above) from the operator of the aircraft into which the kerosene is delivered. Www myfreetaxes com tampa In a “flash title transaction” the position holder sells the kerosene to a wholesale distributor (reseller) that in turn sells the kerosene to the aircraft operator as the kerosene is being removed from a terminal into the fuel tank of an aircraft. Www myfreetaxes com tampa In this case, the position holder will be treated as having a certificate from the operator of the aircraft if: The aircraft operator puts the reseller's name, address, and EIN on the certificate in place of the position holder's information; and The reseller provides the position holder with a statement of the kerosene reseller. Www myfreetaxes com tampa Reseller statement. Www myfreetaxes com tampa   This is a statement that is signed under penalties of perjury by a person with authority to bind the reseller; is provided at the bottom or on the back of the certificate (or in an attached document); and contains: The reseller's name, address, and EIN; The position holder's name, address, and EIN; and A statement that the reseller has no reason to believe that any information in the accompanying aircraft operator's certificate is false. Www myfreetaxes com tampa Credits or Refunds. Www myfreetaxes com tampa   A claim may be made by the ultimate purchaser (the operator) for taxed kerosene for use in aviation 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). Www myfreetaxes com tampa A claim may be made by a registered ultimate vendor for certain sales. Www myfreetaxes com tampa For more information, see chapter 2. Www myfreetaxes com tampa Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. Www myfreetaxes com tampa Other Fuels include alternative fuels. Www myfreetaxes com tampa Alternative fuels are: Liquefied petroleum gas (LPG), “P Series” fuels, Compressed natural gas (CNG) (discussed later), Liquefied hydrogen, Any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, Liquid fuel derived from biomass, Liquefied natural gas (LNG), and Liquefied gas derived from biomass. Www myfreetaxes com tampa Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. Www myfreetaxes com tampa Qualified methanol and ethanol fuels. Www myfreetaxes com tampa   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. Www myfreetaxes com tampa The tax rates are listed in the Instructions for Form 720. Www myfreetaxes com tampa Partially exempt methanol and ethanol fuels. Www myfreetaxes com tampa   A reduced tax rate applies to these fuels. Www myfreetaxes com tampa Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. Www myfreetaxes com tampa The tax rates are listed in the Instructions for Form 720. Www myfreetaxes com tampa Motor vehicles. Www myfreetaxes com tampa   Motor vehicles include all types of vehicles, whether or not registered (or required to be registered) for highway use, that have both the following characteristics. Www myfreetaxes com tampa They are propelled by a motor. Www myfreetaxes com tampa They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t
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Understanding Your CP75 Notice

We’re auditing your tax return and we need documentation to verify the Earned Income Credit (EIC) that you claimed. The Earned Income Credit and/or the Additional Child Tax Credit (ACTC) portion(s) of your refund is being held pending the results of the audit.


What you need to do

  • Read the notice and the enclosed forms carefully. They explain the information you must send to us.
  • Provide copies of the documentation we request to verify the items that we are auditing.
  • Complete the response form by indicating which items your supporting documentation addresses and return the form with the documents you are submitting.

You may want to

  • Review this notice with your tax preparer.
  • Call us for assistance at the toll-free telephone number listed in the top right corner of your notice.
  • Review the rules for claiming the Earned Income Credit and make sure that your child meets the four tests: the Relationship, Age, Residency and Joint Return tests, to qualify for the credit. Read more about the qualifying child rules.
  • Find out if you can claim the Earned Income credit if you do not have a qualifying child. Find the rules for those without a qualifying child here.

Answers to Common Questions

Why was my return selected for audit?
While most returns are accepted as filed, some are selected for examination. The IRS examines (or audits) some federal tax returns to determine if income, expenses, and credits are being reported accurately. The IRS selects returns for examination using various methods which include random sampling, computerized screening, and comparison of information received by the IRS such as Forms W-2 and 1099. Having your return selected for examination does not suggest that you made an error or were dishonest.

Can I claim the Earned Income Credit for my fiancé’s child?
No. You must be married to the child’s parent during the tax year in question to receive the credit.

What do I need to send?
Please refer to the Form 886-H we sent with your notice. There is a separate form for each item being audited that explains what supporting documentation to send.

What if I can’t provide the requested documentation?
We will disallow the items being audited and send you an examination report that shows the proposed changes to your tax return.

What if I did not file a tax return claiming the items you are questioning and someone else is using my name and social security number?
Contact us at the number listed on the top right corner of your notice. You can also refer to the IRS Identity Theft resource page for more information.

Can I file my tax return while I am being audited?
Yes, you should continue to file all required tax returns before the due date to avoid additional penalties and interest.


Tips for next year

Avoid errors that can delay your refund or result in the IRS denying your EIC claim. Find out the most common errors in claiming EITC here.

Page Last Reviewed or Updated: 07-Mar-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

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