part4-31

4.4.4 
Claims

4.4.4.1 
(02-08-1999)
Overview/Claims

  1. This chapter provides instruction for processing
    claims.

  2. Taxpayers may file claims at any time. An amount
    claimed should be placed on the AIMS data base. A claim source code (30, 31,
    32, or 35) may also be appropriate.

  3. See IRM 4.13, Audit Reconsideration if claims is filed due to a prior
    examination.

4.4.4.1.1 
(03-01-2003)
Determine Source Code

  1. The following should be used to determine the proper Source Code to
    use when establishing a claim/amended return on AIMS.

    IF research shows that
    the original return     		THEN
    has never
    been examined     		use Source
    Code 30.
    was previously
    examined and is not on AIMS     		use Source
    Code 73.
    was previously
    examined but is still on AIMS in Status Code 90     		Reopen
    AIMS and retain the original source code.

  2. A Transaction Code 30X will be present on the transcript indicates that
    the return was examined.

  3. The presence of a TC 29X should not be considered an examination of
    the return.

  4. The module balance has no bearing on which source code to use.

  5. Alpha statute
    “AA”
    is appropriate for use with all
    source codes but should be used only when the normal statute date is within
    30 days of expiration or has already expired. ERCS requires that an amount
    claimed be present on the data base before AA is allowed.

4.4.4.2 
(02-08-1999)
Source Code 30

  1. Source code 30 requires that a claim amount be
    present. However a claim amount can be use with any source code.

4.4.4.2.1 
(02-08-1999)
Invalid Source Code 30

  1. Returns that are incorrectly assigned Source Code
    30 may be surveyed without scheduling an overassessment by using Command Code
    AMAXUE to correct the source code and to remove the amount claimed from the
    data base.

4.4.4.3 
(02-08-1999)
Claim Amount

  1. If the correct amount of claim is not on the data
    base (Form 5546 or an AMDIS(A) display), use a Form 5348 to update AIMS with
    the correct amount. The corrected amount can also be entered on Form 5344
    when the case is being closed, or Form 5349 after the case has been closed.

  2. If the correct amount is on the data base, then
    no entry is required on Form 5344 when the case is being closed.

  3. If there is an amount claimed on the data base,
    and it has been determined that the claim will not be examined or surveyed
    (Disposal Code 34), only disposal codes 28, 29, 33 and 99 are valid. To use
    any other survey disposal code, delete the claim amount.

4.4.4.3.1 
(02-08-1999)
Computing the Amount Claimed

  1. The amount claimed is the specific amount of refund
    requested. If the taxpayer has filed for
    “the entire amount
    of tax paid”
    , the amount claimed is the amount of tax shown on the return.
    If the taxpayer has filed for
    “$1 or more”
    or
    ”
    such amount as may be due”
    , the amount claimed is the amount that the
    examiner has computed and recorded on the final notice to the taxpayer as
    the amount of claim. This notice will be in the form of a claim allowance,
    partial allowance, or disallowance.

4.4.4.3.1.1 
(02-08-1999)
Application for Tentative Carryback

  1. Forms 1045 and 1139 (Applications for Tentative
    Carryback) are not treated as claims when the amount requested has been refunded,
    even though a claim form with the same issue and tax period was filed at the
    same time.

  2. Occasionally a taxpayer will file a second claim
    for an additional operating loss allowance. If the taxpayer’s return
    is open in Examination, the refund is not made and the second claim is associated
    with the return. Enter the amount of the second claim.

4.4.4.3.1.2 
(02-08-1999)
Multiple Claims for the Same Tax Year

  1. When several claims are made for different issues,
    the amount of claim entered is the net amount of all the issues.

    1. A jobber may file multiple claims, one for each
      customer. This is treated as one claim and the total amount claimed is entered.

    2. Multiple claims involving one employment tax return,
      Form 941 of the same employer, are treated as one claim and the total amount
      claimed is entered.

  2. When several claims are filed for the same issues,
    or if one claim has additional issues, enter the larger amount.

4.4.4.3.1.3 
(02-08-1999)
Multiple Tax Years

  1. Claims that cover longer than one tax period,
    must be recomputed so that an amount for each tax period is entered.

4.4.4.3.1.4 
(02-08-1999)
Surveyed Claims

  1. Enter the amount allowable as a refund rather
    than the amount claimed on surveyed claims.

4.4.4.4 
(02-08-1999)
Claim Disposal Codes

  1. Claims may use a variety of disposal codes depending
    on the situation.

4.4.4.4.1 
(02-08-1999)
Claim Allowed in Full

  1. Use Disposal Code 03 for an examined claim allowed
    in full.

4.4.4.4.2 
(02-08-1999)
Claim Partially Allowed

  1. For an agreed claim partially allowed use Disposal
    Code 03.

  2. For an unagreed claim partially allowed use an
    appropriate unagreed Disposal Code.

4.4.4.4.3 
(02-08-1999)
Claim Disallowed in Full

  1. Use Disposal Code 01 for a claim disallowed in
    full.

    Note:

    Item 41 is required with
    this disposal code.

4.4.4.4.4 
(02-08-1999)
Surveyed Claim

  1. Use Disposal Code 34 for a surveyed claim.

4.4.4.5 
(02-08-1999)
Informal or Carryback/Carryforward Claims

  1. When the campus receives informal or carryback/carry-forward
    claims, they are hand carried to Adjustment Branch un-processed and without
    posting a TC 977 to establish an amended return freeze. If there is an open
    Examination control, Adjustments Branch will forward these claims to the Examination
    Branch at the campus with the print of the AMDISA display attached reflecting
    the open control. This is so that actions can be taken to prevent premature
    closing of the open case until claims are associated.

  2. Claims received in the Examination Branch for
    cases under its control will be associated immediately upon receipt.

  3. Claims received for association with area controlled
    cases will be handled as follows:

4.4.4.5.1 
(03-01-2003)
Informal Claim

  1. Input an
    “0″
    freeze on AIMS
    to prevent the case from being closed.

  2. Attach a buckslip to the claim with instructions
    to release the freeze code once the claim has been associated with the return.

4.4.4.5.2 
(02-08-1999)
Carryback Claim (excess investment credit, net operating loss, etc.)

  1. Input freeze code
    “P”
    to the
    carryback year only using Form 5348. The freeze code must remain on the AIMS
    through final processing by the Case Processing Support closing function.
    This freeze code will prevent the AIMS closing (CC AMCLS) unless an Interest
    Computation Date, Item 11 and/or an interest adjustment is present on Form
    5344. Presence of either input element will cause the removal of the P freeze
    from the AIMS account. Freeze Code P identifies that a carryback claim was
    filed, must be associated with the open case file, and that a restricted interest
    computation must be considered by the area closing function.

  2. Make an AMDISA print (reflecting the freeze action)
    and forward it separately with a buckslip to the area Case Processing Support
    function. This information is needed since they act as the control point for
    all freeze codes used on area accounts.

  3. Forward the claims to the appropriate area office
    group or function for association with the open return.

4.4.4.5.3 
(02-08-1999)
Category A (pre-refund) Claims with Carryback Issues

  1. The procedures for Carryback Claim above also
    apply when Category A (pre refund) claims involving carryback issues are selected
    by the Examination Branch at the campus for area examination. Freeze Code
    P will be input with Form 5348 after AIMS has been established. This will
    ensure that a restricted interest computation is considered by the Case Processing
    Support closing function.

4.4.4.6 
(02-08-1999)
Claim of Right Case

  1. Claim of Right cases are rarely seen in the area
    office. A claims of right occurs when, under the provisions of IRC Section
    1341, a taxpayer includes an item in gross income for a prior taxable year
    (or years), but it was later determined that the taxpayer did not have an
    unrestricted right to that item of income.

  2. The taxpayer takes the deduction in the year in
    which the determination was made, but the amount of the tax decrease is based
    on the tax for the prior taxable year which would result solely from the exclusion
    of the item. For this reason, the decrease in tax is taken as a credit against
    tax and can be more than the total tax liability on the account. The proper
    way to apply the credit is to reduce tax. If there is any excess, it is applied
    as a miscellaneous credit.

4.4.4.6.1 
(02-08-1999)
Group Procedures

  1. Attach Form 3198 to the front of the case file.

  2. Consult the Technical Support function when there
    are questions on these cases.

4.4.4.6.2 
(02-08-1999)
Closing Function Procedures

  1. Determine the total tax assessed from a transcript.

    IF the total tax assessed
    is     		THEN
    sufficient
    to allow the total recommended overassessment     		Use TC
    301 to reduce the tax on the module.
    not sufficient
    to allow the total recommended overassessment     		1. Use
    TC 301 to reduce the tax on the module to zero.
      2. Use
    reference numbers 766 or 767 to allow the additional credits needed to process
    the overassessment.

4.4.4.7 
(02-08-1999)
Claims for Abatement/Refund of Dyed Diesel Fuel Penalty Assessments

  1. Effective 1/1/97, all claims for abatement or
    refund of dyed diesel fuel penalty assessments are processed through the Cincinnati
    Campus. These claims, when denied, must be disallowed by certified mail, and
    the taxpayer does not have administrative appeal rights. The claimant can
    only seek relief by filing suit in the United States District Court or the
    United States Court of Claims within two years of our claim disallowance letter.

4.4.4.7.1 
(02-08-1999)
Procedures

  1. To ensure uniformity for processing dyed diesel
    fuel penalty claims, the following procedures have been implemented:

4.4.4.7.1.1 
(02-08-1999)
Cincinnati SC Exam Classification

  1. All claims received by the Cincinnati Campus Exam
    Classification will be checked against Master File for validity of claims
    (i.e. that corresponding penalty has been assessed and payment has been received)
    . If claim is determined to be valid, file will be forwarded to the Area PSP
    Support where the taxpayer resides

4.4.4.7.1.2 
(02-08-1999)
Area

  1. Area PSP Support will assign the claim to either
    the excise or the Diesel Compliance Officer (DCO) group.

4.4.4.7.1.2.1 
(02-08-1999)
AIMS Control

  1. All claims received directly by the area office
    for taxpayers residing in their area will be immediately established on NMF
    AIMS, using the NMFT code associated with the taxpayers primary income tax
    return (20 for Form 1040, 32 for Form 1120)

4.4.4.7.1.2.2 
(02-08-1999)
ExFON Control

  1. Regardless of who actually works the claim, the
    DCO manager will enter the appropriate claim information onto the Excise Fuel
    On-line Network (ExFON) system.

4.4.4.7.1.2.3 
(02-08-1999)
Penalty Assessed in Another Area

  1. If the penalty was assessed by a different area,
    the receiving area will contact the assessing area DCO manager and request
    that the penalty file be transferred. This will also require the assessing
    area to update/transfer the organization code on the ExFON system.

4.4.4.7.1.2.4 
(02-08-1999)
Taxpayer Resides in Another Area

  1. All claims received directly by the assessing
    area for taxpayers not residing in the area will be forwarded along with a
    copy of the penalty file and control on ExFON, to the area of the taxpayer’s
    residence.

4.4.4.7.1.2.5 
(02-08-1999)
Manager

  1. The manager, upon receipt of the dyed fuel penalty
    claims file, should review the file and ensure that the claim is valid (i.e.
    the penalty has been assessed and payment has been received from the taxpayer).

  2. The manager should evaluate the file and determine
    if assignment to an examiner or DCO is required. ExFON will not allow assignment
    to an examiner, therefore in this situation, control on ExFON will remain
    with the DCO manager.

  3. All contacts with the taxpayer or representative,
    as well as disposition of claim (allowance or denial) and supporting reason
    must be recorded on ExFON in the Taxpayer Contact application.

4.4.4.7.1.2.6 
(02-08-1999)
Claim Allowed

  1. If any portion of the claim is allowed, Form 8278
    will be prepared to abate the penalty (using the MFT the penalty was assessed
    under, i.e. 13 or 55) and sent to closing function for processing. The closing
    function will follow procedures for processing civil penalties using blocking
    series 52X.

  2. If the claim is disallowed, the group will prepare
    the certified claim disallowance letter, send the original by certified mail,
    and suspense the case for ten days with another copy of the letter in case
    the taxpayer initiates contact.

  3. At the end of the suspense period, Form 8485 will
    be prepared by the area with the tax period and correct MFT for the taxpayers
    related return (i.e. MFT 30 for the individual return) . Enter the transaction
    code (TC) 290 for .00, using blocking series 15, (this will not generate a
    refile DLN or associate the claim with the return) . Enter in the Explanation
    Section of Form 8485, Disallowed Dyed Diesel Fuel Claim. Submit the file for
    terminal input and forwarding to the Campus Files function.

4.4.4.7.1.2.7 
(02-08-1999)
Claim Disallowed

  1. If the claim is disallowed for a taxpayer that
    has an income tax filing requirement, but the return has not been filed, the
    closing function will follow procedures in Text 4.4.8.6.

4.4.4.7.1.2.8 
(02-08-1999)
Closing AIMS

  1. The NMF AIMS controls will be closed using Disposal
    Code 28, following normal procedures.

4.4.4.7.1.2.9 
(02-08-1999)
Disposition of File

  1. The office will retain the paper penalty file
    and claim information for two years from the date of claim disallowance, or
    date of full payment, whichever is later.

4.4.4.8 
(02-08-1999)
Claims for Excise Tax on Fuel

  1. There is an excise tax on gasoline, gasohol, aviation
    gasoline, diesel fuel, aviation fuels other than gasoline, special motor fuels
    and fuels used in commercial transportation on inland waterways.

  2. In order to file a claim for refund, the taxpayer
    MUST have either a social security number (SSN) or an employer identification
    number (EIN) . Entities, including state and local governments, nonprofit
    educational organizations, foreign individuals and businesses must use an
    EIN.

4.4.4.8.1 
(02-08-1999)
AIMS Controls

  1. At this time, these claims cannot be processed
    through AIMS. These claims must be established on AIMS as a NMF account (MFT
    45) for control purposes only.

4.4.4.8.2 
(02-08-1999)
Group Procedures

  1. The examining officer will identify the case as
    a fuel excise tax claim via Form 3198. Form 3198 must identify the specific
    type of claim that is being processed, e.g., gas used on a farm or aviation
    fuel-farm. If the specific type of claim is not identified, the case file
    will be returned.

4.4.4.8.3 
(02-08-1999)
Research Requirements

  1. Research the entity through Command Codes EINAD,
    ENMOD, and/or INOLE and request a MFTRA transcript to verify that the TIN
    used on the claim is on record and to verify the taxpayer’s filing requirement.
    It is important that account research be reviewed to ensure that the claim
    has not already been allowed and refunded to the taxpayer by the campus. MARS
    (Manual Accounting Replacement System) /Unit Ledger Card research must also
    be performed to determine if a claim was allowed Non-Master File. If research
    indicates that the claim has already been allowed, contact the examining officer
    so that appropriate adjustments can be made that will provide for proper disposal
    of the case file.

  2. If there is no record of the TIN, the claim will
    be returned to the group. The group should reject the taxpayer’s claim
    advising that the claim may be refiled after the TIN is obtained. Form SS–4
    (for an EIN) or Form SS–5 (for an SSN) will be sent to the taxpayer
    along with a form letter outlining the reason(s) for the claim rejection.

  3. Processing procedures are outlined below based
    on the specific type of claim being processed.

4.4.4.8.4 
(02-08-1999)
Gasoline Tax Claim

  1. Claims for refund or credit can be filed for the
    following non-taxable or exempt uses.

    1. Off highway business use;

    2. Use in commercial fishing;

    3. Exclusive use of state or local governments;

    4. Exclusive use of non-profit educational organization.

    5. Export, including shipment to a possession of the
      U.S.;

    6. Supplies for vessels;

    7. Use on a farm for farming purposes;

    8. Use for intercity or local bus or school bus;

    9. Blend stocks or additives not used to produce gasoline;

    10. Commercial aviation;

    11. Supplies for aircraft;

    12. Aircraft museums and helicopters;

    13. Gasohol blending.

4.4.4.8.5 
(02-08-1999)
Filing Quarterly Claims

  1. A quarterly claim can be filed if claiming a refund
    of $1,000 or more for any of the first three quarters of the taxpayer’s
    tax year. In arriving at the $1,000, taxpayers cannot include Items (i) through
    (m), listed above, with the first eight non-taxable uses. The taxpayer could
    submit a separate quarterly claims if Items (i) through (m) amounted to $1,000
    or more for the quarter.

  2. Claims filed by farmers for
    “gasoline
    used on a farm for farming purposes”
    cannot file a claim for refund
    on Form 843. They must file for credit on their income tax return. Farmers
    can file Form 843 for refund of other types of gasoline excise tax used for
    purposes other than as stated.

  3. Gasoline claims must be filed by the last day
    of the third month following the end of the quarter.

  4. Only one claim can be filed for each of the first
    three quarters of the tax year. The fourth quarter, for any amount, must be
    claimed on the income tax return. The Internal Revenue Code (IRC) does not
    restrict the term
    “quarter”
    to mean a
    ”
    calendar quarter.”
    The term
    “quarter”
    means any
    three consecutive months in a 12 month period. Therefore, a fiscal year taxpayer’s
    first quarter would be the first three months in their taxable year.

  5. A yearly claim, including the fourth quarter,
    can be filed by an entity that is not required to file an income tax return
    (state or local government or an exempt organization are not required to file
    an income tax return) . These taxpayers can file quarterly claims for the
    first three quarters and/or one yearly claim covering the fourth quarter and
    any amounts for which the taxpayer did not file a quarterly claim.

    Note:

    Taxpayers that HAVE
    an income tax filing requirement, CANNOT FILE a
    fourth quarter claim. If the taxpayer DOES NOT HAVE an
    income tax filing requirement, a yearly or quarterly claim can be filed.

4.4.4.8.6 
(03-01-2003)
Gasoline Claim Processing

  1. Quarterly claims are filed and received prior
    to the posting of a return (TC 150).

  2. If research determines that the
    TAXPAYER HAS AN INCOME TAX FILING REQUIREMENT, the gasoline claim can
    be processed on an MFT Code 02, 05, 06, 30, 33, or 34 tax module. The entity
    that filed the claim will determine what MFT Code to process it against. If
    the claim was filed by a corporation, use MFT 02; an individual, MFT 30, etc.

    1. Process the adjustment on Form 8485 to input the
      claim through IDRS via CC ADJ54.

    2. The tax period used will be the current tax period,
      (e.g., 9112). Ensure that TC 150 HAS NOT POSTED for
      the tax period used. If TC 150 HAS POSTED, the claim
      will be processed as a
      “post-assessment claim. ”
      Refer
      to (9) below.

    3. Input TC 290 for a zero (–0–).

    4. Use Credit Reference Number 301 with the corresponding
      money amount for GASOLINE tax claims. The credit
      reference number will convert to a TC 766 when posted to Master File. The
      credit reference number with a negative amount will decrease the credit and
      generate a TC 767 on Master File. There should not be more than three claims
      filed by the taxpayer for gasoline tax claims. Contact the examining officer
      if this situation occurs. When there are multiple claims (not to exceed three),
      input each claim amount separately using Form 8485, with the appropriate reference
      number and amount for the claim being processed.

    5. Use Blocking Series 40.

    6. Credit interest is automatically restricted from
      generating when the transaction is input with Blocking Series 40.

    7. IF THE TAXPAYER DOES NOT HAVE
      ONE OF THE FOLLOWING INCOME TAX FILING REQUIREMENTS, MFT CODE 02, 05,
      06, 30, 33, OR 34, input the adjustment on a module based on whether the taxpayer
      filing the claim is an individual, corporation, etc. (e.g., if the taxpayer
      is an individual, input the claim on MFT 30) . Use of Blocking Series 40 will
      prevent the adjustment from unposting because a return has not posted and
      it will prevent a filing requirement from being established for the taxpayer.

    8. In the
      “Explanation”
      area of
      Form 8485, annotate
      “Excise Claim for gas credit.”

    9. If an original return has posted, Blocking Series
      “00″
      (adjustment with original return) or
      “15
      ”
      (adjustment without original return) should be used. If the claim
      filed is for refund of excise tax paid, no interest is to be allowed on the
      claim.

    10. IF A TAXPAYER SUBMITS A FORM 4136
      AND IS TAKING A CREDIT AGAINST HIS INCOME TAX, THE MODULE WOULD NOT BE RESTRICTED
      FOR CREDIT INTEREST.

4.4.4.8.6.1 
(02-08-1999)
Gas Tax Claim—Gasoline Wholesale Distributor

  1. A wholesale distributor is any person who sells
    gasoline to producers, retailers, or to users who purchase in bulk quantities
    and delivers to bulk storage tanks.

  2. A wholesale distributor may obtain a credit or
    refund on their own behalf if they sell gasoline (on which they have paid
    the tax) at a tax excluded price for exempt use.

  3. The exempt uses are:

    1. Exclusive use of state or local government or non-profit
      educational organization;

    2. Export;

    3. Supplies for vessels and aircraft, or;

    4. Production of special motor fuels.

  4. The distributor may file a Form 843 or take the
    credit on their Form 720 return as a
    “Line 2″
    adjustment
    up to the amount of tax assessed for that quarter. Any remaining credit (that
    exceeds the Form 720 tax liability) must be processed Non-Master File. Non-Master
    File claim processing procedures are found in IRM 21.14, BMF and NMF DP Tax
    Adjustments.

  5. There is no restriction on the number of claims
    that can be filed by a gasoline wholesale distributor.

  6. Claims by a gasoline wholesaler for
    DIESEL FUEL are not valid and are not to be processed. If received,
    they are to be returned to the group advising that the claim is invalid and
    unallowable.

4.4.4.8.6.2 
(02-08-1999)
Gas Tax Claim—Gasohol Blending

  1. Gasohol is a blend of gasoline and alcohol that
    is at least 10% gasohol. Blenders of gasohol who buy gasoline for gasohol
    production at a price that includes the full rate of tax are eligible for
    a credit or refund of part of the tax. For this credit, the gasoline must
    be used to produce gasohol and must be used in the taxpayer’s trade
    or business. The amount that can be claimed is the difference between the
    full rate and the reduced rate for each gallon of gasoline used to make gasohol.
    No refund is available if the gasoline was purchased at the reduced rate.

  2. Gasohol blenders may file Form 843 to claim a
    refund of the difference in rates for any period in which the claim is $200.00
    or more and the period is not less than one week. These claims must be processed
    within 20 days of the received date of the claim. If the refund is not issued
    within this time frame, interest must be paid on the claim amount. These claims
    will be processed as a manual refund.

  3. Follow procedures in Text 4.4.8.6, Gasoline Claim
    Processing, using credit Reference Number 312 and Blocking Series 49.

  4. CAUTION MUST BE EXERCISED IN
    ALLOWING THIS CLAIM. ENSURE THE CLAIM HAS NOT ALREADY BEEN ALLOWED BY THE
    CAMPUS.

4.4.4.8.6.3 
(02-08-1999)
Diesel and Aviation Fuel Tax Claims

  1. CLAIMS FOR DIESEL AND AVIATION
    FUEL SHOULD BE VERY RARE BECAUSE THERE ARE PROVISIONS FOR TAXPAYERS TO PURCHASE
    TAX-FREE FUEL WHEN USED FOR A NON-TAXABLE PURPOSE.

  2. Claims for refund or credit of diesel or aviation
    fuel can be filed for the following non-taxable or exempt uses.

    1. Used for a qualified local bus or school bus.

    2. Used for intercity or local buses.

    3. Off-highway business use.

    4. Use other than as a fuel such as in a diesel-powered
      highway vehicle; pleasure and commercial boats; heating oil and use in stationary
      motors.

    5. Exclusive use of state and local governments.

    6. Exclusive use of non-profit educational organizations.

    7. Export, including shipment to a possession of the
      United States.

    8. Use in a diesel-powered train.

    9. Vehicle use by aircraft museums.

    10. Commercial aviation.

    11. Aircraft museums and helicopters.

  3. A quarterly claim can be filed if claiming $750
    or more for any of the first three quarters of the taxpayer’s tax year.
    A special rule for diesel and aviation fuel allows the taxpayer to aggregate
    the amount of fuel used in each quarter. If the amount is less than $750 in
    one quarter, but the amount of the claim for more than one quarter is at least
    $750, a claim can be filed for the quarter in which the combined total is
    at least $750.

    1. The claim must be filed by the last day of the third
      month following the end of the quarter.

    2. Only one claim can be filed for each of the first
      three quarters of the tax year. The fourth quarter claim, for any amount,
      must be claimed on the income tax return.

  4. Follow claim processing procedures in Text 4.4.8.6,
    Gasoline Claim Processing. Use Reference Number 303 for diesel fuel and 310
    for aviation fuel.

4.4.4.8.6.4 
(02-08-1999)
Special Motor Fuel Tax Claims

  1. Special motor fuels includes benzol, benzene,
    naphtha, liquefied petroleum, gas, casing head and natural gasoline and any
    other liquids other than gasoline, diesel fuel, kerosene, gas oil, or fuel
    oil that does not fall within certain specifications.

  2. Claims for refund or credit can be filed for the
    following non-taxable or exempt uses.

    1. Any use other than as a fuel for the propulsion
      of a motor vehicle or motor boat.

    2. Off-highway business use.

    3. Use in the fisheries or whaling business.

    4. Export, including shipment to a possession of the
      United States.

    5. Supplies for vessels.

    6. Exclusive use for state and local governments.

    7. Exclusive use of non-profit educational organizations.

    8. Resale.

    9. Intercity, local and school buses.

  3. A quarterly claim can be filed if claiming a refund
    of $1,000.00 or more for any of the first three quarters of the taxpayer’s
    tax year.

    1. Farmers claiming for
      “special motor
      fuels used on a farm for farming purposes”
      must take the credit on their
      income tax return; they cannot file Form 843. Farmers can make other claims
      on Form 843.

    2. The claim must be filed by the last day of the third
      month following the end of the quarter.

    Only one claim can be filed
    for each of the first three quarters of the tax year. The fourth quarter,
    for any amount, must be claimed on the taxpayer’s income tax return.

  4. Follow claim processing procedures in Text 4.4.8.6,
    Gasoline Claim Processing. Use Reference Number 304 for special motor fuel
    tax claims.

4.4.4.8.6.5 
(02-08-1999)
Disallowed Fuel Tax Claims

  1. Claims for refund of excise tax paid on purchases
    of certain types of fuel are allowed under various sections of the Code. The
    fuel tax claims are allowed and processed against a taxpayer’s income
    tax module. In the case of taxpayer’s that do not have an income tax
    filing requirement, the claim is processed against an income tax module based
    on the taxpayer that has filed the claim. An individual would be processed
    against a Form 1040 module, etc. See IRM 4.4.4.8.6.
    for fuel tax claim processing procedures).

  2. If the claim has been disallowed and there is
    no income tax filing requirement, input a TC 290 for .00 in Blocking Series
    40 (IMF MFT 30, BMF MFT 02) and forward along with workpapers to the campus
    in the source document folder. The claim will be filed behind the TC 290 DLN
    for future reference.

  3. For disallowed claims that can be associated with
    a tax return, except that the return has not been filed yet (pre-assessment
    claim processing),

    1. Input TC 930 via Form 3177 on Master File, to file
      the disallowed claim, disallowance letter and workpapers;

    2. When the income tax return (TC 150) posts, it will
      be associated with the claim and returned to the originator for input of TC
      290 for .00 using Blocking Series 99.

    3. IT IS IMPERATIVE THAT TC 930 BE
      INPUT ONLY FOR DISALLOWED CLAIMS FOR TAXPAYERS THAT HAVE AN INCOME TAX FILING
      REQUIREMENT WHERE IT IS KNOWN THAT A RETURN WILL BE FILED AT A FUTURE DATE.

    4. After terminal input of Form 3177, maintain a copy/original
      of the form in a tickler file. The form will be used as a reference for TC
      930 follow-up action. The Campus Files function will forward a CP 98 or 198
      to the originator of the TC 930. See IRM 4.4.4.8.6.5.1.
      for TC 930 follow-up procedures.

  4. For AIMS control purposes, if the claim has been
    established as a NMF account, the AIMS data base will be closed using Disposal
    Code 28. If the account has been established as a Master File 720 module,
    close the AIMS data base using Disposal Code 33, Error Account.

4.4.4.8.6.5.1 
(02-08-1999)
TC 930 Follow-up Action for Disallowed Fuel Tax Claims

  1. Claims for refund of excise tax paid on purchases
    of certain types of fuel are allowed under various sections of the Code. The
    fuel tax claims are allowed and processed against a taxpayer’s income
    tax module. In the case of taxpayer’s that do not have an income tax
    filing requirement, the claim is processed against an income tax module based
    on the taxpayer that has filed the claim. An individual would be processed
    against a Form 1040 module, etc. (refer to Text 4.4.8.6 for fuel tax claim
    processing procedures).

  2. When a fuel tax claim is disallowed for a taxpayer
    that HAS an income tax filing requirement (but the return has not yet been
    filed for the income tax module that the claim is processed against), special
    action is necessary to ensure the claim source document(s) are associated
    with the return when it is filed.

  3. A TC 930
    “push code”
    is input
    that causes a CP 98 (IMF) or CP 198 (BMF) to generate that alerts the Campus
    Files function to associate the claim source document(s) with the tax return
    when it is filed. The Files function will route the tax return and claim documents
    to the function that input the TC 930.

  4. When this package is received by the area/campus
    Processing function, the following action is necessary:

    1. Prepare Form 8485 with the tax period as reflected
      on the return received from Files;

    2. Input TC 290 for .00, using Blocking Series 99;

    3. Enter in the Explanation Section of Form 8485,
      ” Disallowed Excise Fuel Tax Claim.”

    4. Submit the file for terminal input and forwarding
      to the Campus Files function.

  5. The above action is necessary so that the income
    tax module that the claim was processed against will reflect consideration
    and disallowance of the excise fuel tax claim.

Law Offices of Darrin T. Mish, PA

100 S. Edison Ave. Suite A, PO Box 3414, Tampa, FL 33606 (813) 229-7100
Made with Semiologic Pro • Colorblock-blue skin by Techie Coach