3. Filing Claims

This chapter tells you how and when to make a claim for a credit or refund of excise taxes on fuels. This chapter also covers recordkeeping requirements, interest and penalty provisions, and when to include the credit or refund in your income.

General Information

Generally, you will provide all the information needed to claim a credit or refund when you properly complete the claim form. In some cases, you will have to attach additional information. You need to keep records that support your claim for a credit or refund.

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. No special form is required, but the records should establish all the following information.

Ultimate purchaser.   If you are an ultimate purchaser, you must keep the following records.

• The number of gallons purchased and used during the period covered by your claim.
• The dates of the purchases.
• The names and addresses of suppliers and amounts purchased from each in the period covered by your claim.
• The nontaxable use for which you used the fuel.
• The number of gallons used for each nontaxable use.

It is important that your records show separately the number of gallons used for each nontaxable use that qualifies as a claim. If the fuel is exported, you must have proof of exportation.

For more information about keeping records, see Publication 583, Starting a Business and Keeping Records, or Publication 552, Recordkeeping for Individuals.

Gasohol blending.   If you are a gasohol blender, you must keep the following information for each batch of gasohol.

• The name and address of the person that sold you the gasoline.
• The date and location of the purchase of the gasoline.
• The number of gallons of gasoline.
• The name and address of the person that sold you the alcohol.
• The date and location of the purchase of the alcohol.
• The number of gallons and type of alcohol.

Registered ultimate vendor.   If you are a registered ultimate vendor (as discussed in chapter 1 under Undyed Diesel Fuel and Undyed Kerosene), you must keep certain information pertaining to the sale of the fuel.

To make a claim, you must have sold the diesel fuel or kerosene at a tax-excluded price, repaid the tax to the buyer, or obtained the buyer's written consent to the allowance of the claim.

To make a claim, you must have a registration number that has not been revoked or suspended. If you are an ultimate vendor (farming and state use), you must have a UV registration number. If you are an ultimate vendor (blocked pump), you must have a UP registration number. You can get either registration number from the IRS by completing Form 637, Application for Registration (For Certain Excise Tax Activities), and providing the information requested in its instructions.

Farming and state use.   If you sell undyed diesel fuel or undyed kerosene for use on a farm for farming purposes or for use by a state or local government, you must keep the following information.

• The name and taxpayer identification number of each person (farmer, custom harvester, or government unit) that bought the fuel.
• The number of gallons sold to each person.
• An unexpired certificate from the buyer. See Table 3-1.

Blocked pump.   If you sell undyed kerosene 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.

• The date of each sale.
• The name and address of the buyer.
• The number of gallons sold to that buyer.

Blending.   If you sell undyed kerosene for blending with diesel fuel in an area under a declaration of extreme cold and the blend will be sold for use or used for heating purposes, you must keep the following information.

• The number of gallons sold to each person.
• An unexpired certificate from the buyer for each purchase of kerosene. See Table 3-2.

Taxpayer identification number.   To file a claim, you must have a taxpayer identification number. Your taxpayer identification number can be any of the following.

• Employer identification number (EIN).
• Social security number (SSN).
• Individual taxpayer identification number (ITIN), if you are an alien individual and do not have and are not eligible to get an SSN.

If you normally file only a U.S. individual income tax return (such as Form 1040 or 1040NR), use your SSN or ITIN. You get an SSN by filing Form SS-5, Application for a Social Security Card, with the Social Security Administration. To get an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS.

If you operate a business, use your EIN. You get an EIN by filing Form SS-4, Application for Employer Identification Number, with the IRS.

Filing date on holiday or weekend.   If the last day for filing your claim falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day.

Credit or refund.   A credit is an amount you claim on your income tax return when you file it at the end of the year. If you meet certain requirements (discussed later), you can claim a refund during the year.

Credit only.   You can claim the following taxes only as a credit.

• Tax on gasoline, gasohol, or aviation gasoline used on a farm for farming purposes.
• Tax on fuels used for nontaxable uses if the total for the tax year is less than $750.
• Tax on fuel you did not include in any claim for refund previously filed for any quarter of the tax year.

Claiming a Credit

You make a claim for credit on Form 4136 and attach it to your income tax return. Do not claim a credit for any amount for which you have filed a refund claim.

When to file.   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 gasohol blender or registered ultimate vendor claims).

Once you have filed a Form 4136, you cannot file an amended return to show an increase in the number of gallons reported on a line of that form. See the following discussion for when you can file a claim on an amended return.

Fuel tax claim on amended return.   You may be able to make a fuel tax claim on an amended return for the year you used or sold the fuels. Generally, you must file an amended return by the later of 3 years from the date you filed your original income tax return or within 2 years from the time you paid the income tax. A return filed early is considered to have been filed on the due date.

You can file an amended return to claim a fuel tax credit if any of the following apply.

• You did not claim any credit for fuel taxes on Form 4136 for the tax year.
• Your credit is for gasohol blending, discussed in chapter 1.
• Your credit is for a claim group, explained next, for which you did not previously file a claim on Form 4136 for the tax year.

Claims on Form 4136 (other than for gasohol blending) are separated into seven claim groups. Once you file Form 4136 with a claim for a group, you cannot file an amended return with another claim for that group. However, you can file an amended return with a claim for another group.

Model Certificate A

The following tables show what claims are in each group. The numbers in the second column of each table refer to the line numbers on Form 4136. The numbers in the third column are from the Type of Use Table shown as Table 1-1 in chapter 1.

Table 3-3. Claim Groups for Tax Years 1999-2000

Group	Line Number	Type of Use
I	1b	No entry*
	1d-f, 2b	1
II	1d-f	2
	1a, 2a	No entry*
III	1c-f	5, 7
IV	1c-f	3, 4
	2b	3, 9
V	7	No entry*
VI	3a	2, 3, 6, 7, 8
	3b-c, 4a, 5, 6	No entry*
	4b	1, 3, 9, 10, 11
VII	2b	10
*You cannot enter a type of use number on Form 4136 for the line number(s) shown in column 2

Table 3-4. Claim Groups for Tax Years After 2000

Group	Line Number	Type of Use
I	1b	No entry*
	1d-f, 2b	1
II	1d-f	2
	1a, 2a	No entry*
III	1c-f	5, 7
IV	1c-f	3, 4
	2b	3, 9
V	8	No entry*
VI	3a, 4a	2, 3, 6, 7, 8
	5b-c	1, 3, 9, 10, 11
	3b-c, 5a, 6, 7	No entry*
VII	2b	10
*You cannot enter a type of use number on Form 4136 for the line number(s) shown in column 2

For each tax year, you can make only one claim for each group.

Example.   You file your 2002 income tax return and claim a fuel tax credit. Your Form 4136 shows an amount on line 1b for use of gasoline on a farm for farming purposes. This is a Group I claim. You cannot amend your return to claim a credit for an amount on line 2b for use of aviation gasoline on a farm for farming purposes (Type of Use 1) since that is also a Group I claim. However, if you used aviation fuel on a farm for farming purposes, you can amend your return to claim the credit for that fuel tax because that would be a Group VI claim reported on line 5b (Type of Use 1).

Model Certificate B

How to claim a credit.   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, or farmers' cooperative.

Individuals.   You claim the credit on line 68 of Form 1040. Check box b on line 68. If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit.

Partnerships.   A partnership cannot claim the credit on Form 1065, U.S. Return of Partnership Income. The partnership must include on line 25 of Schedule K-1 (Form 1065), Partner's Share of Income, Credits, Deductions, etc., each partner's share of the number of gallons of each fuel sold or used for a nontaxable use, the type of use, and the applicable credit per gallon. Each partner claims the credit on his or her income tax return for his or her share of the fuel used by the partnership.

An electing large partnership can claim the credit on line 27 of Form 1065-B, U.S. Return of Income for Electing Large Partnerships.

Corporations.   To claim the credit, corporations use either line 32g of Form 1120, U.S. Corporation Income Tax Return, or line 28g of Form 1120-A, U.S. Corporation Short-Form Income Tax Return.

S corporations.   To claim the credit, S corporations use line 23c of Form 1120S, U.S. Income Tax Return for an S Corporation.

Farmers' cooperative associations.   If the cooperative must file Form 990-C, Farmers' Cooperative Association Income Tax Return, it uses line 32g to claim the credit.

Trusts.   Trusts required to file Form 1041, U.S. Income Tax Return for Estates and Trusts, use line 24g to claim the credit.

Claiming a Refund

You can claim a refund on Form 8849. Complete and attach to Form 8849 the appropriate Form 8849 schedules. If you file Form 720, you can use the Schedule C portion of Form 720 for your refund claims. (See the Form 720 instructions.) 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.

The type of use table in the instructions for Form 8849 includes nontaxable uses that are not discussed in this publication. The ultimate purchaser for these uses is generally a government entity or a tax-exempt organization.

Ultimate Purchasers

If you are an ultimate purchaser, you can claim a refund for the excise tax on fuels you purchase and use for a nontaxable use. You can file a claim for refund for any quarter of your tax year for which you can claim $750 or more. This amount is the excise tax on all fuels used for a nontaxable use during that quarter or any prior quarter (for which no other claim has been filed) during the tax year.

If you cannot claim at least $750 at the end of a quarter, you carry the amount over to the next quarter of your tax year to determine if you can claim at least $750. If you cannot claim at least $750 at the end of the fourth quarter of your tax year, you must claim a credit on your income tax return using Form 4136.

How to file.   File the claim for refund by filling out Schedule 1 (Form 8849) and attaching it to Form 8849. Send it to the address shown in the instructions. Only one claim may be filed for a quarter.

Only the registered ultimate vendor can claim a refund for the excise tax on undyed diesel fuel and undyed kerosene in certain situations, as discussed later.

Example.   You purchased gasoline and undyed diesel fuel. For the first quarter of your tax year, the excise tax on fuel you use for an off-highway business use is $184 for gasoline and $244 for diesel fuel. You cannot file a claim for refund since the total ($428) is less than $750.

For the second quarter, the excise tax on fuel you use for an off-highway business use is $92 for gasoline and $244 for diesel fuel. You add the amount from the first quarter ($428) to the total amount from the second quarter ($336) and determine you can file a claim for refund since the total is $764.

When to file.   You must file a quarterly claim by the last day of the first quarter following the last quarter included in the claim. If you do not file a timely refund claim for the fourth quarter of your tax year, you will have to claim a credit for that amount on your income tax return, as discussed earlier.

Generally, an annual claim must be made on Form 4136. However, the following must use Schedule 1 (Form 8849) to file an annual claim.

• The United States.
• A state, political subdivision of a state, and the District of Columbia.
• An organization exempt from income tax under section 501(a) of the Internal Revenue Code that is not required to file an income tax return.

Gasohol Blending

If you are a gasohol blender, you can make a claim to get a refund of part of the excise tax on gasoline used to produce gasohol. See Gasohol Blending under Gasoline and Gasohol in chapter 1. The following claim requirements apply.

• The claim must be for gasohol sold or used during a period of at least 1 week.
• The claim must be for at least $200.
• The claim can only be made by the gasohol blender.

How to file.   File the claim by filling out Schedule 3 (Form 8849) and attaching it to Form 8849. The Form 8849 cannot have any other schedule attached if a Schedule 3 is attached. Send it to the address shown in the instructions. Write Gasohol Claim on the envelope.

When to file.   The claim must be filed by the last day of the first quarter following the earliest quarter included in the claim. If you do not meet the requirements or file a timely refund claim, you will have to claim a credit on your income tax return, as discussed earlier.

You cannot combine this claim with any other claim on Form 8849.

Registered Ultimate Vendors

If you are a registered ultimate vendor, you can make a claim to get a refund of the excise tax on undyed diesel fuel or undyed kerosene that you sold. See Sales by Registered Ultimate Vendors under Undyed Diesel Fuel and Undyed Kerosene in chapter 1.

Undyed diesel fuel.   You must meet the following requirements for this claim.

• The claim must be for undyed diesel fuel sold for use on a farm for farming purposes or by a state or local government.
• The claim must be for sales during a period of at least 1 week.
• The claim must be for at least $200. Claims for sales by a registered ultimate vendor of undyed kerosene can be combined with claims for sales of undyed diesel fuel to meet this requirement.

Undyed kerosene.   You must meet the following requirements for this claim.

• The claim must be for undyed kerosene sold for use on a farm for farming purposes, for use by a state or local government, from a blocked pump, or for blending with diesel fuel to be used for heating purposes.
• The claim must be for sales during a period of at least 1 week.
• The claim must be for at least $100.

How to file.   File the claim by filling out Schedule 2 (Form 8849) and attaching it to Form 8849. The Form 8849 cannot have any other schedule attached if a Schedule 2 is attached. Send it to the address shown in the instructions. Write Diesel Fuel/Kerosene Claim on the envelope.

When to file.   The claim must be filed by the last day of the first quarter following the earliest quarter included in the claim. If you do not meet the requirements or file a timely refund claim, you will have to claim a credit on your income tax return, as discussed earlier.

You cannot combine this claim with any other claim on Form 8849.

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