Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2008 Page 9
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16The IRS may withdraw the right to make deposits of
a sale) where the delivering person and receiving person
!
tax using the safe harbor rule from any person not
are both taxable fuel registrants and all of the following
complying with these rules.
occur.
CAUTION
•
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
Schedule A—Excise Tax Liability
operator.
•
The exchange transaction occurs before or at the same
How to complete. Complete Schedule A to record net tax
time as completion of removal across the rack by the
liabilities for Part I taxes for each semimonthly period in a
receiving person.
quarter even if your net liability is under $2,500.
•
The terminal operator in its records treats the receiving
person as the person that removes the product across the
The following table will help you determine which boxes
terminal rack for purposes of reporting the transaction on
to complete on Schedule A.
Form 720-TO, Terminal Operator Report.
•
IF you are reporting under THEN you report on AND enter the net
The transaction is the subject of a written contract.
the...
line...
tax liability in
boxes...
Information reporting. Schedule T — Two-Party Exchange
Information Reporting is used to report gallons of taxable
Regular method
1
A – G
fuel:
Alternative method
2
M – S
•
Received in a two-party exchange within a terminal.
These gallons must also be included on the appropriate line
If you are reporting more than one type of tax on
on page 1 of Form 720, or
lines 1 and 2:
•
Delivered in a two-party exchange contemporaneous with
1. Add the net tax liability for each tax for each
a removal across the rack.
semimonthly period, and
2. Enter the total in the applicable box.
Enter all gallons of fuel received or delivered in a
two-party exchange within a terminal for the applicable fuel.
Additional rules. Report communications and air
transportation taxes based on:
•
Actual collections on line 1, or
Schedule C—Claims
•
Amounts billed or tickets sold on line 2. The amount of tax
to report for a semimonthly period is the net amount that is
Complete all information requested for each line, including
considered collected during that period.
month income tax year ends and period of claim. Enter the
month as “MM.” Enter the period of claim as “MM/DD/YYYY
Example. The amounts billed for communications
– MM/DD/YYYY.” Your claim will be disallowed if you do not
services from June 1 – 15, 2008, are considered collected
follow the required procedures or do not provide all the
during the period July 1 – 7, 2008, and are reported for the
required information. Also, you are certifying to the
3rd quarter of 2008 on Schedule A in box M, not the 2nd
applicable statement(s) on Schedule C when you make a
quarter of 2008.
claim. See Pub. 510 for more information.
Reporting tax liability under the special September rule.
You must include in gross income (income tax
An additional reporting is required under the special
!
return) the amount from line 4 of Form 720 if you
September rule (for the period shown in the chart above) as
took a deduction on the income tax return that
follows:
CAUTION
included the amount of the taxes and that deduction
reduced the income tax liability. See Publication 510 for
Regular method taxes
Enter the tax liability for the period beginning
more information.
September 16 and ending September 25/26
in box G, Special rule for September.
Do not use Schedule C:
Alternative method taxes
Enter the tax included in amounts billed or
•
If you are not reporting a liability on Form 720, in Part I or
tickets sold during the period beginning
Part II;
September 1 and ending September 10/11 in
•
box S, Special rule for September box on the
To claim amounts that you took or will take as a credit on
4th quarter return.
Form 4136, Credit for Federal Tax Paid on Fuels, or as a
refund on Form 8849, Claim for Refund of Excise Taxes,
For the remaining days in the September period, report
and its separate schedules (see the Caution below);
the liability as follows:
•
To make adjustments to liability reported on Forms 720
filed for prior quarters, use Form 720X; or
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Regular method taxes
Enter the liability for the period beginning
To request an abatement or refund of interest under
September 26/27 and ending September 30
section 6404(e) (due to IRS errors or delays) or an
in box F.
abatement or refund of a penalty or addition to tax under
Alternative method taxes
Enter the tax included in the amounts billed or
section 6404(f) (due to erroneous IRS written advice).
tickets sold for the period beginning
Instead, use Form 843, Claim for Refund and Request for
September 11/12 and ending September 15
Abatement. Also use Form 843 to request refund of the
in box M of the 4th quarter return. Enter the
tax included in amounts billed or tickets sold
penalty under section 6715 for misuse of dyed fuel.
during the period beginning September 16
and ending September 30 in box N of the 4th
If you make a claim for alcohol, biodiesel or
quarter return.
!
renewable diesel, or alternative fuel, a claim for
refund or credit on Form 8849, Form 4136, Form
CAUTION
6478, or Form 8864 can only be made after the sum of the
Schedule T—Two-Party Exchange
alcohol fuel mixture credit, biodiesel or renewable diesel
mixture credit, alternative fuel credit, and alternative fuel
Information Reporting
mixture credit is first applied to reduce your taxable fuel
liability reported on Form 720 for any particular quarter. See
In a two-party exchange, the receiving person, not the
Pub. 510, Notice 2005-4, and Notice 2005-62 for more
delivering person, is liable for the tax imposed on the
information.
removal of taxable fuel from the terminal at the terminal
rack. A two-party exchange means a transaction (other than
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