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Irs 2012 Tax Forms

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Irs 2012 Tax Forms

Irs 2012 tax forms 2. Irs 2012 tax forms   Simplified Employee Pensions (SEPs) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Setting Up a SEPWhen not to use Form 5305-SEP. Irs 2012 tax forms How Much Can I Contribute?Contribution Limits Deducting ContributionsDeduction Limit for Contributions for Participants Deduction Limit for Self-Employed Individuals Carryover of Excess SEP Contributions When To Deduct Contributions Where To Deduct Contributions Salary Reduction Simplified Employee Pensions (SARSEPs)SARSEP ADP test. Irs 2012 tax forms Deferral percentage. Irs 2012 tax forms Employee compensation. Irs 2012 tax forms Compensation of self-employed individuals. Irs 2012 tax forms Choice not to treat deferrals as compensation. Irs 2012 tax forms Limit on Elective Deferrals Tax Treatment of Deferrals Distributions (Withdrawals) Additional TaxesEffects on employee. Irs 2012 tax forms Reporting and Disclosure Requirements Topics - This chapter discusses: Setting up a SEP How much can I contribute Deducting contributions Salary reduction simplified employee pensions (SARSEPs) Distributions (withdrawals) Additional taxes Reporting and disclosure requirements Useful Items - You may want to see: Publication 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4285 SEP Checklist 4286 SARSEP Checklist 4333 SEP Retirement Plans for Small Businesses 4336 SARSEP for Small Businesses 4407 SARSEP—Key Issues and Assistance Forms (and Instructions) W-2 Wage and Tax Statement 1040 U. Irs 2012 tax forms S. Irs 2012 tax forms Individual Income Tax Return 5305-SEP Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 5305A-SEP Salary Reduction Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A SEP is a written plan that allows you to make contributions toward your own retirement and your employees' retirement without getting involved in a more complex qualified plan. Irs 2012 tax forms Under a SEP, you make contributions to a traditional individual retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. Irs 2012 tax forms A SEP-IRA is owned and controlled by the employee, and you make contributions to the financial institution where the SEP-IRA is maintained. Irs 2012 tax forms SEP-IRAs are set up for, at a minimum, each eligible employee (defined below). Irs 2012 tax forms A SEP-IRA may have to be set up for a leased employee (defined in chapter 1), but does not need to be set up for excludable employees (defined later). Irs 2012 tax forms Eligible employee. Irs 2012 tax forms   An eligible employee is an individual who meets all the following requirements. Irs 2012 tax forms Has reached age 21. Irs 2012 tax forms Has worked for you in at least 3 of the last 5 years. Irs 2012 tax forms Has received at least $550 in compensation from you in 2013. Irs 2012 tax forms This amount remains the same in 2014. Irs 2012 tax forms    You can use less restrictive participation requirements than those listed, but not more restrictive ones. Irs 2012 tax forms Excludable employees. Irs 2012 tax forms   The following employees can be excluded from coverage under a SEP. Irs 2012 tax forms Employees covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Irs 2012 tax forms Nonresident alien employees who have received no U. Irs 2012 tax forms S. Irs 2012 tax forms source wages, salaries, or other personal services compensation from you. Irs 2012 tax forms For more information about nonresident aliens, see Publication 519, U. Irs 2012 tax forms S. Irs 2012 tax forms Tax Guide for Aliens. Irs 2012 tax forms Setting Up a SEP There are three basic steps in setting up a SEP. Irs 2012 tax forms You must execute a formal written agreement to provide benefits to all eligible employees. Irs 2012 tax forms You must give each eligible employee certain information about the SEP. Irs 2012 tax forms A SEP-IRA must be set up by or for each eligible employee. Irs 2012 tax forms Many financial institutions will help you set up a SEP. Irs 2012 tax forms Formal written agreement. Irs 2012 tax forms   You must execute a formal written agreement to provide benefits to all eligible employees under a SEP. Irs 2012 tax forms You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP. Irs 2012 tax forms However, see When not to use Form 5305-SEP, below. Irs 2012 tax forms   If you adopt an IRS model SEP using Form 5305-SEP, no prior IRS approval or determination letter is required. Irs 2012 tax forms Keep the original form. Irs 2012 tax forms Do not file it with the IRS. Irs 2012 tax forms Also, using Form 5305-SEP will usually relieve you from filing annual retirement plan information returns with the IRS and the Department of Labor. Irs 2012 tax forms See the Form 5305-SEP instructions for details. Irs 2012 tax forms If you choose not to use Form 5305-SEP, you should seek professional advice in adopting a SEP. Irs 2012 tax forms When not to use Form 5305-SEP. Irs 2012 tax forms   You cannot use Form 5305-SEP if any of the following apply. Irs 2012 tax forms You currently maintain any other qualified retirement plan other than another SEP. Irs 2012 tax forms You have any eligible employees for whom IRAs have not been set up. Irs 2012 tax forms You use the services of leased employees, who are not your common-law employees (as described in chapter 1). Irs 2012 tax forms You are a member of any of the following unless all eligible employees of all the members of these groups, trades, or businesses participate under the SEP. Irs 2012 tax forms An affiliated service group described in section 414(m). Irs 2012 tax forms A controlled group of corporations described in section 414(b). Irs 2012 tax forms Trades or businesses under common control described in section 414(c). Irs 2012 tax forms You do not pay the cost of the SEP contributions. Irs 2012 tax forms Information you must give to employees. Irs 2012 tax forms   You must give each eligible employee a copy of Form 5305-SEP, its instructions, and the other information listed in the Form 5305-SEP instructions. Irs 2012 tax forms An IRS model SEP is not considered adopted until you give each employee this information. Irs 2012 tax forms Setting up the employee's SEP-IRA. Irs 2012 tax forms   A SEP-IRA must be set up by or for each eligible employee. Irs 2012 tax forms SEP-IRAs can be set up with banks, insurance companies, or other qualified financial institutions. Irs 2012 tax forms You send SEP contributions to the financial institution where the SEP-IRA is maintained. Irs 2012 tax forms Deadline for setting up a SEP. Irs 2012 tax forms   You can set up a SEP for any year as late as the due date (including extensions) of your income tax return for that year. Irs 2012 tax forms Credit for startup costs. Irs 2012 tax forms   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP that first became effective in 2013. Irs 2012 tax forms For more information, see Credit for startup costs under Reminders, earlier. Irs 2012 tax forms How Much Can I Contribute? The SEP rules permit you to contribute a limited amount of money each year to each employee's SEP-IRA. Irs 2012 tax forms If you are self-employed, you can contribute to your own SEP-IRA. Irs 2012 tax forms Contributions must be in the form of money (cash, check, or money order). Irs 2012 tax forms You cannot contribute property. Irs 2012 tax forms However, participants may be able to transfer or roll over certain property from one retirement plan to another. Irs 2012 tax forms See Publication 590 for more information about rollovers. Irs 2012 tax forms You do not have to make contributions every year. Irs 2012 tax forms But if you make contributions, they must be based on a written allocation formula and must not discriminate in favor of highly compensated employees (defined in chapter 1). Irs 2012 tax forms When you contribute, you must contribute to the SEP-IRAs of all participants who actually performed personal services during the year for which the contributions are made, including employees who die or terminate employment before the contributions are made. Irs 2012 tax forms Contributions are deductible within limits, as discussed later, and generally are not taxable to the plan participants. Irs 2012 tax forms A SEP-IRA cannot be a Roth IRA. Irs 2012 tax forms Employer contributions to a SEP-IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Irs 2012 tax forms Unlike regular contributions to a traditional IRA, contributions under a SEP can be made to participants over age 70½. Irs 2012 tax forms If you are self-employed, you can also make contributions under the SEP for yourself even if you are over 70½. Irs 2012 tax forms Participants age 70½ or over must take required minimum distributions. Irs 2012 tax forms Time limit for making contributions. Irs 2012 tax forms   To deduct contributions for a year, you must make the contributions by the due date (including extensions) of your tax return for the year. Irs 2012 tax forms Contribution Limits Contributions you make for 2013 to a common-law employee's SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000. Irs 2012 tax forms Compensation generally does not include your contributions to the SEP. Irs 2012 tax forms The SEP plan document will specify how the employer contribution is determined and how it will be allocated to participants. Irs 2012 tax forms Example. Irs 2012 tax forms Your employee, Mary Plant, earned $21,000 for 2013. Irs 2012 tax forms The maximum contribution you can make to her SEP-IRA is $5,250 (25% x $21,000). Irs 2012 tax forms Contributions for yourself. Irs 2012 tax forms   The annual limits on your contributions to a common-law employee's SEP-IRA also apply to contributions you make to your own SEP-IRA. Irs 2012 tax forms However, special rules apply when figuring your maximum deductible contribution. Irs 2012 tax forms See Deduction Limit for Self-Employed Individuals , later. Irs 2012 tax forms Annual compensation limit. Irs 2012 tax forms   You cannot consider the part of an employee's compensation over $255,000 when figuring your contribution limit for that employee. Irs 2012 tax forms However, $51,000 is the maximum contribution for an eligible employee. Irs 2012 tax forms These limits are $260,000 and $52,000, respectively, in 2014. Irs 2012 tax forms Example. Irs 2012 tax forms Your employee, Susan Green, earned $210,000 for 2013. Irs 2012 tax forms Because of the maximum contribution limit for 2013, you can only contribute $51,000 to her SEP-IRA. Irs 2012 tax forms More than one plan. Irs 2012 tax forms   If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $51,000 or 100% of the participant's compensation. Irs 2012 tax forms When you figure this limit, you must add your contributions to all defined contribution plans maintained by you. Irs 2012 tax forms Because a SEP is considered a defined contribution plan for this limit, your contributions to a SEP must be added to your contributions to other defined contribution plans you maintain. Irs 2012 tax forms Tax treatment of excess contributions. Irs 2012 tax forms   Excess contributions are your contributions to an employee's SEP-IRA (or to your own SEP-IRA) for 2013 that exceed the lesser of the following amounts. Irs 2012 tax forms 25% of the employee's compensation (or, for you, 20% of your net earnings from self-employment). Irs 2012 tax forms $51,000. Irs 2012 tax forms Excess contributions are included in the employee's income for the year and are treated as contributions by the employee to his or her SEP-IRA. Irs 2012 tax forms For more information on employee tax treatment of excess contributions, see chapter 1 in Publication 590. Irs 2012 tax forms Reporting on Form W-2. Irs 2012 tax forms   Do not include SEP contributions on your employee's Form W-2 unless contributions were made under a salary reduction arrangement (discussed later). Irs 2012 tax forms Deducting Contributions Generally, you can deduct the contributions you make each year to each employee's SEP-IRA. Irs 2012 tax forms If you are self-employed, you can deduct the contributions you make each year to your own SEP-IRA. Irs 2012 tax forms Deduction Limit for Contributions for Participants The most you can deduct for your contributions to you or your employee's SEP-IRA is the lesser of the following amounts. Irs 2012 tax forms Your contributions (including any excess contributions carryover). Irs 2012 tax forms 25% of the compensation (limited to $255,000 per participant) paid to the participants during 2013 from the business that has the plan, not to exceed $51,000 per participant. Irs 2012 tax forms In 2014, the amounts in (2) above are $260,000 and $52,000, respectively. Irs 2012 tax forms Deduction Limit for Self-Employed Individuals If you contribute to your own SEP-IRA, you must make a special computation to figure your maximum deduction for these contributions. Irs 2012 tax forms When figuring the deduction for contributions made to your own SEP-IRA, compensation is your net earnings from self-employment (defined in chapter 1), which takes into account both the following deductions. Irs 2012 tax forms The deduction for the deductible part of your self-employment tax. Irs 2012 tax forms The deduction for contributions to your own SEP-IRA. Irs 2012 tax forms The deduction for contributions to your own SEP-IRA and your net earnings depend on each other. Irs 2012 tax forms For this reason, you determine the deduction for contributions to your own SEP-IRA indirectly by reducing the contribution rate called for in your plan. Irs 2012 tax forms To do this, use the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed, whichever is appropriate for your plan's contribution rate, in chapter 5. Irs 2012 tax forms Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Irs 2012 tax forms Carryover of Excess SEP Contributions If you made SEP contributions that are more than the deduction limit (nondeductible contributions), you can carry over and deduct the difference in later years. Irs 2012 tax forms However, the carryover, when combined with the contribution for the later year, is subject to the deduction limit for that year. Irs 2012 tax forms If you also contributed to a defined benefit plan or defined contribution plan, see Carryover of Excess Contributions under Employer Deduction in chapter 4 for the carryover limit. Irs 2012 tax forms Excise tax. Irs 2012 tax forms   If you made nondeductible (excess) contributions to a SEP, you may be subject to a 10% excise tax. Irs 2012 tax forms For information about the excise tax, see Excise Tax for Nondeductible (Excess) Contributions under Employer Deduction in chapter 4. Irs 2012 tax forms When To Deduct Contributions When you can deduct contributions made for a year depends on the tax year on which the SEP is maintained. Irs 2012 tax forms If the SEP is maintained on a calendar year basis, you deduct the yearly contributions on your tax return for the year within which the calendar year ends. Irs 2012 tax forms If you file your tax return and maintain the SEP using a fiscal year or short tax year, you deduct contributions made for a year on your tax return for that year. Irs 2012 tax forms Example. Irs 2012 tax forms You are a fiscal year taxpayer whose tax year ends June 30. Irs 2012 tax forms You maintain a SEP on a calendar year basis. Irs 2012 tax forms You deduct SEP contributions made for calendar year 2013 on your tax return for your tax year ending June 30, 2014. Irs 2012 tax forms Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Irs 2012 tax forms For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040), Profit or Loss From Farming; partnerships deduct them on Form 1065, U. Irs 2012 tax forms S. Irs 2012 tax forms Return of Partnership Income; and corporations deduct them on Form 1120, U. Irs 2012 tax forms S. Irs 2012 tax forms Corporation Income Tax Return, or Form 1120S, U. Irs 2012 tax forms S. Irs 2012 tax forms Income Tax Return for an S Corporation. Irs 2012 tax forms Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Irs 2012 tax forms (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Irs 2012 tax forms , you receive from the partnership. Irs 2012 tax forms ) Remember that sole proprietors and partners can't deduct as a business expense contributions made to a SEP for themselves, only those made for their common-law employees. Irs 2012 tax forms Salary Reduction Simplified Employee Pensions (SARSEPs) A SARSEP is a SEP set up before 1997 that includes a salary reduction arrangement. Irs 2012 tax forms (See the Caution, next. Irs 2012 tax forms ) Under a SARSEP, your employees can choose to have you contribute part of their pay to their SEP-IRAs rather than receive it in cash. Irs 2012 tax forms This contribution is called an “elective deferral” because employees choose (elect) to set aside the money, and they defer the tax on the money until it is distributed to them. Irs 2012 tax forms You are not allowed to set up a SARSEP after 1996. Irs 2012 tax forms However, participants (including employees hired after 1996) in a SARSEP set up before 1997 can continue to have you contribute part of their pay to the plan. Irs 2012 tax forms If you are interested in setting up a retirement plan that includes a salary reduction arrangement, see chapter 3. Irs 2012 tax forms Who can have a SARSEP?   A SARSEP set up before 1997 is available to you and your eligible employees only if all the following requirements are met. Irs 2012 tax forms At least 50% of your employees eligible to participate choose to make elective deferrals. Irs 2012 tax forms You have 25 or fewer employees who were eligible to participate in the SEP at any time during the preceding year. Irs 2012 tax forms The elective deferrals of your highly compensated employees meet the SARSEP ADP test. Irs 2012 tax forms SARSEP ADP test. Irs 2012 tax forms   Under the SARSEP ADP test, the amount deferred each year by each eligible highly compensated employee as a percentage of pay (the deferral percentage) cannot be more than 125% of the average deferral percentage (ADP) of all non-highly compensated employees eligible to participate. Irs 2012 tax forms A highly compensated employee is defined in chapter 1. Irs 2012 tax forms Deferral percentage. Irs 2012 tax forms   The deferral percentage for an employee for a year is figured as follows. Irs 2012 tax forms   The elective employer contributions (excluding certain catch-up contributions)  paid to the SEP for the employee for the year     The employee's compensation (limited to $255,000 in 2013)   The instructions for Form 5305A-SEP have a worksheet you can use to determine whether the elective deferrals of your highly compensated employees meet the SARSEP ADP test. Irs 2012 tax forms Employee compensation. Irs 2012 tax forms   For figuring the deferral percentage, compensation is generally the amount you pay to the employee for the year. Irs 2012 tax forms Compensation includes the elective deferral and other amounts deferred in certain employee benefit plans. Irs 2012 tax forms See Compensation in chapter 1. Irs 2012 tax forms Elective deferrals under the SARSEP are included in figuring your employees' deferral percentage even though they are not included in the income of your employees for income tax purposes. Irs 2012 tax forms Compensation of self-employed individuals. Irs 2012 tax forms   If you are self-employed, compensation is your net earnings from self-employment as defined in chapter 1. Irs 2012 tax forms   Compensation does not include tax-free items (or deductions related to them) other than foreign earned income and housing cost amounts. Irs 2012 tax forms Choice not to treat deferrals as compensation. Irs 2012 tax forms   You can choose not to treat elective deferrals (and other amounts deferred in certain employee benefit plans) for a year as compensation under your SARSEP. Irs 2012 tax forms Limit on Elective Deferrals The most a participant can choose to defer for calendar year 2013 is the lesser of the following amounts. Irs 2012 tax forms 25% of the participant's compensation (limited to $255,000 of the participant's compensation). Irs 2012 tax forms $17,500. Irs 2012 tax forms The $17,500 limit applies to the total elective deferrals the employee makes for the year to a SEP and any of the following. Irs 2012 tax forms Cash or deferred arrangement (section 401(k) plan). Irs 2012 tax forms Salary reduction arrangement under a tax-sheltered annuity plan (section 403(b) plan). Irs 2012 tax forms SIMPLE IRA plan. Irs 2012 tax forms In 2014, the $255,000 limit increases to $260,000 and the $17,500 limit remains at $17,500. Irs 2012 tax forms Catch-up contributions. Irs 2012 tax forms   A SARSEP can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Irs 2012 tax forms The catch-up contribution limit for 2013 is $5,500 and remains at $5,500 for 2014. Irs 2012 tax forms Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the elective deferral limit (the lesser of 25% of compensation or $17,500), the SARSEP ADP test limit discussed earlier, or the plan limit (if any). Irs 2012 tax forms However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Irs 2012 tax forms The catch-up contribution limit. Irs 2012 tax forms The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Irs 2012 tax forms   Catch-up contributions are not subject to the elective deferral limit (the lesser of 25% of compensation or $17,500 in 2013 and in 2014). Irs 2012 tax forms Overall limit on SEP contributions. Irs 2012 tax forms   If you also make nonelective contributions to a SEP-IRA, the total of the nonelective and elective contributions to that SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000 for 2013 ($52,000 for 2014). Irs 2012 tax forms The same rule applies to contributions you make to your own SEP-IRA. Irs 2012 tax forms See Contribution Limits , earlier. Irs 2012 tax forms Figuring the elective deferral. Irs 2012 tax forms   For figuring the 25% limit on elective deferrals, compensation does not include SEP contributions, including elective deferrals or other amounts deferred in certain employee benefit plans. Irs 2012 tax forms Tax Treatment of Deferrals Elective deferrals that are not more than the limits discussed earlier under Limit on Elective Deferrals are excluded from your employees' wages subject to federal income tax in the year of deferral. Irs 2012 tax forms However, these deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Irs 2012 tax forms Excess deferrals. Irs 2012 tax forms   For 2013, excess deferrals are the elective deferrals for the year that are more than the $17,500 limit discussed earlier. Irs 2012 tax forms For a participant who is eligible to make catch-up contributions, excess deferrals are the elective deferrals that are more than $23,000. Irs 2012 tax forms The treatment of excess deferrals made under a SARSEP is similar to the treatment of excess deferrals made under a qualified plan. Irs 2012 tax forms See Treatment of Excess Deferrals under Elective Deferrals (401(k) Plans) in chapter 4. Irs 2012 tax forms Excess SEP contributions. Irs 2012 tax forms   Excess SEP contributions are elective deferrals of highly compensated employees that are more than the amount permitted under the SARSEP ADP test. Irs 2012 tax forms You must notify your highly compensated employees within 2½ months after the end of the plan year of their excess SEP contributions. Irs 2012 tax forms If you do not notify them within this time period, you must pay a 10% tax on the excess. Irs 2012 tax forms For an explanation of the notification requirements, see Rev. Irs 2012 tax forms Proc. Irs 2012 tax forms 91-44, 1991-2 C. Irs 2012 tax forms B. Irs 2012 tax forms 733. Irs 2012 tax forms If you adopted a SARSEP using Form 5305A-SEP, the notification requirements are explained in the instructions for that form. Irs 2012 tax forms Reporting on Form W-2. Irs 2012 tax forms   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Irs 2012 tax forms You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Irs 2012 tax forms You must also include them in box 12. Irs 2012 tax forms Mark the “Retirement plan” checkbox in box 13. Irs 2012 tax forms For more information, see the Form W-2 instructions. Irs 2012 tax forms Distributions (Withdrawals) As an employer, you cannot prohibit distributions from a SEP-IRA. Irs 2012 tax forms Also, you cannot make your contributions on the condition that any part of them must be kept in the account after you have made your contributions to the employee's accounts. Irs 2012 tax forms Distributions are subject to IRA rules. Irs 2012 tax forms Generally, you or your employee must begin to receive distributions from a SEP-IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. Irs 2012 tax forms For more information about IRA rules, including the tax treatment of distributions, rollovers, required distributions, and income tax withholding, see Publication 590. Irs 2012 tax forms Additional Taxes The tax advantages of using SEP-IRAs for retirement savings can be offset by additional taxes that may be imposed for all the following actions. Irs 2012 tax forms Making excess contributions. Irs 2012 tax forms Making early withdrawals. Irs 2012 tax forms Not making required withdrawals. Irs 2012 tax forms For information about these taxes, see chapter 1 in Publication 590. Irs 2012 tax forms Also, a SEP-IRA may be disqualified, or an excise tax may apply, if the account is involved in a prohibited transaction, discussed next. Irs 2012 tax forms Prohibited transaction. Irs 2012 tax forms   If an employee improperly uses his or her SEP-IRA, such as by borrowing money from it, the employee has engaged in a prohibited transaction. Irs 2012 tax forms In that case, the SEP-IRA will no longer qualify as an IRA. Irs 2012 tax forms For a list of prohibited transactions, see Prohibited Transactions in chapter 4. Irs 2012 tax forms Effects on employee. Irs 2012 tax forms   If a SEP-IRA is disqualified because of a prohibited transaction, the assets in the account will be treated as having been distributed to the employee on the first day of the year in which the transaction occurred. Irs 2012 tax forms The employee must include in income the fair market value of the assets (on the first day of the year) that is more than any cost basis in the account. Irs 2012 tax forms Also, the employee may have to pay the additional tax for making early withdrawals. Irs 2012 tax forms Reporting and Disclosure Requirements If you set up a SEP using Form 5305-SEP, you must give your eligible employees certain information about the SEP when you set it up. Irs 2012 tax forms See Setting Up a SEP , earlier. Irs 2012 tax forms Also, you must give your eligible employees a statement each year showing any contributions to their SEP-IRAs. Irs 2012 tax forms You must also give them notice of any excess contributions. Irs 2012 tax forms For details about other information you must give them, see the instructions for Form 5305-SEP or Form 5305A-SEP (for a salary reduction SEP). Irs 2012 tax forms Even if you did not use Form 5305-SEP or Form 5305A-SEP to set up your SEP, you must give your employees information similar to that described above. Irs 2012 tax forms For more information, see the instructions for either Form 5305-SEP or Form 5305A-SEP. Irs 2012 tax forms Prev  Up  Next   Home   More Online Publications
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SOI Tax Stats - Statistical Methodology

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Statistics compiled for the SOI studies are generally based on stratified probability samples of income tax returns or other forms filed with the Internal Revenue Service (IRS). The statistics do not reflect any changes made by the taxpayer through an amended return or by the IRS as a result of an audit. As returns are filed and processed for tax purposes, they are assigned to sampling classes (strata) based on such criteria as: industry, presence or absence of a tax form or schedule, and various income factors or other measures of economic size (such as total assets, total receipts, size of gift, and size of estate). The samples are selected from each stratum over the appropriate filing periods. Thus, sample selection can continue for a given study for several calendar years—3 for corporations because of the incidence of fiscal (noncalendar) year reporting and extensions of filing time. Because sampling must take place before the population size is known precisely, the rates of sample selection within each stratum are fixed. This means, in practice, that both the population and the sample size can differ from those planned. However, these factors do not compromise the validity of the estimates.


Statistics of Income General Sampling Methodology and Data Limitations (PDF - Get Adobe Acrobat Reader)
This article discusses typical sampling procedures used in most Statistics of Income (SOI) programs. Aspects covered briefly include sampling criteria, selection techniques, methods of estimation, and sampling variability (coefficients of variation (CV)). Some of the nonsampling error limitations of the data are also described, as well as the tabular conventions employed.

Sampling Methodology and Data Limitations, by Study
Additional information on sample design and data limitations for specific SOI studies can be found in the link above. More technical information is available, on request, by writing to the Director, Statistics of Income Division RAS:S, Internal Revenue Service, P.O. Box 2608, Washington, DC 20013-2608.

Statistics of Income Research in Statistical Methodology
Follow the link above to find research papers written by members of SOI covering topics such as sample design and models, panel design and analysis, data disclosure and data sharing research, and more.

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Page Last Reviewed or Updated: 23-Jan-2013

The Irs 2012 Tax Forms

Irs 2012 tax forms 1. Irs 2012 tax forms   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. Irs 2012 tax forms 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. Irs 2012 tax forms Reseller statement. Irs 2012 tax forms Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. Irs 2012 tax forms Deep-draft ocean-going vessels. Irs 2012 tax forms Passenger vessels. Irs 2012 tax forms Ocean-going barges. Irs 2012 tax forms State or local governments. Irs 2012 tax forms 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. Irs 2012 tax forms Gasoline, including aviation gasoline and gasoline blendstocks. Irs 2012 tax forms Diesel fuel, including dyed diesel fuel. Irs 2012 tax forms Diesel-water fuel emulsion. Irs 2012 tax forms Kerosene, including dyed kerosene and kerosene used in aviation. Irs 2012 tax forms Other Fuels (including alternative fuels). Irs 2012 tax forms Compressed natural gas (CNG). Irs 2012 tax forms Fuels used in commercial transportation on inland waterways. Irs 2012 tax forms Any liquid used in a fractional ownership program aircraft as fuel. Irs 2012 tax forms The following terms are used throughout the discussion of fuel taxes. Irs 2012 tax forms Other terms are defined in the discussion of the specific fuels to which they pertain. Irs 2012 tax forms Agri-biodiesel. Irs 2012 tax forms   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. Irs 2012 tax forms Approved terminal or refinery. Irs 2012 tax forms   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. Irs 2012 tax forms Biodiesel. Irs 2012 tax forms   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. Irs 2012 tax forms Blended taxable fuel. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms Blender. Irs 2012 tax forms   This is the person that produces blended taxable fuel. Irs 2012 tax forms Bulk transfer. Irs 2012 tax forms   This is the transfer of taxable fuel by pipeline or vessel. Irs 2012 tax forms Bulk transfer/terminal system. Irs 2012 tax forms   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Irs 2012 tax forms 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. Irs 2012 tax forms Cellulosic biofuel. Irs 2012 tax forms   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. Irs 2012 tax forms Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). Irs 2012 tax forms 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. Irs 2012 tax forms Also see Second generation biofuel below. Irs 2012 tax forms Diesel-water fuel emulsion. Irs 2012 tax forms   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. Irs 2012 tax forms 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. Irs 2012 tax forms Dry lease aircraft exchange. Irs 2012 tax forms   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Irs 2012 tax forms Enterer. Irs 2012 tax forms   This is the importer of record (under customs law) for the taxable fuel. Irs 2012 tax forms 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. Irs 2012 tax forms If there is no importer of record, the owner at the time of entry into the United States is the enterer. Irs 2012 tax forms Entry. Irs 2012 tax forms   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. Irs 2012 tax forms This does not apply to fuel brought into Puerto Rico (which is part of the U. Irs 2012 tax forms S. Irs 2012 tax forms customs territory), but does apply to fuel brought into the United States from Puerto Rico. Irs 2012 tax forms Fractional ownership aircraft program and fractional program aircraft. Irs 2012 tax forms   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Irs 2012 tax forms Measurement of taxable fuel. Irs 2012 tax forms   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. Irs 2012 tax forms Other fuels. Irs 2012 tax forms   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. Irs 2012 tax forms Pipeline operator. Irs 2012 tax forms   This is the person that operates a pipeline within the bulk transfer/terminal system. Irs 2012 tax forms Position holder. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms A terminal operator that owns taxable fuel in its terminal is a position holder. Irs 2012 tax forms Rack. Irs 2012 tax forms   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. Irs 2012 tax forms Refiner. Irs 2012 tax forms   This is any person that owns, operates, or otherwise controls a refinery. Irs 2012 tax forms Refinery. Irs 2012 tax forms   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. Irs 2012 tax forms However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. Irs 2012 tax forms For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. Irs 2012 tax forms Registrant. Irs 2012 tax forms   This is a taxable fuel registrant (see Registration Requirements, later). Irs 2012 tax forms Removal. Irs 2012 tax forms   This is any physical transfer of taxable fuel. Irs 2012 tax forms It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. Irs 2012 tax forms However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. Irs 2012 tax forms Renewable diesel. Irs 2012 tax forms   See Renewable Diesel Credits in chapter 2. Irs 2012 tax forms Sale. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms Second generation biofuel. Irs 2012 tax forms   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. Irs 2012 tax forms S. Irs 2012 tax forms C. Irs 2012 tax forms 7545). Irs 2012 tax forms It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. Irs 2012 tax forms It is not alcohol of less than 150 proof (disregard any added denaturants). Irs 2012 tax forms See Form 6478 for more information. Irs 2012 tax forms State. Irs 2012 tax forms   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. Irs 2012 tax forms An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. Irs 2012 tax forms Taxable fuel. Irs 2012 tax forms   This means gasoline, diesel fuel, and kerosene. Irs 2012 tax forms Terminal. Irs 2012 tax forms   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms Terminal operator. Irs 2012 tax forms   This is any person that owns, operates, or otherwise controls a terminal. Irs 2012 tax forms Throughputter. Irs 2012 tax forms   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). Irs 2012 tax forms Vessel operator. Irs 2012 tax forms   This is the person that operates a vessel within the bulk transfer/terminal system. Irs 2012 tax forms However, vessel does not include a deep draft ocean-going vessel. Irs 2012 tax forms Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. Irs 2012 tax forms A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. Irs 2012 tax forms For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. Irs 2012 tax forms The returns are due the last day of the month following the month in which the transaction occurs. Irs 2012 tax forms Generally, these returns can be filed on paper or electronically. Irs 2012 tax forms For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. Irs 2012 tax forms Publication 3536 is only available on the IRS website. Irs 2012 tax forms Form 720-TO. Irs 2012 tax forms   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. Irs 2012 tax forms Each terminal operator must file a separate form for each approved terminal. Irs 2012 tax forms Form 720-CS. Irs 2012 tax forms   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. Irs 2012 tax forms Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. Irs 2012 tax forms See Form 637 for other persons who must register and for more information about registration. Irs 2012 tax forms Persons that are required to be registered. Irs 2012 tax forms   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. Irs 2012 tax forms Persons that may register. Irs 2012 tax forms   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. Irs 2012 tax forms Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. Irs 2012 tax forms However, they must be registered to file claims for certain sales and uses of fuel. Irs 2012 tax forms See Form 637 for more information. Irs 2012 tax forms Taxable fuel registrant. Irs 2012 tax forms   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. Irs 2012 tax forms The term registrant as used in the discussions of these fuels means a taxable fuel registrant. Irs 2012 tax forms Additional information. Irs 2012 tax forms   See the Form 637 instructions for the information you must submit when you apply for registration. Irs 2012 tax forms Failure to register. Irs 2012 tax forms   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. Irs 2012 tax forms Gasoline and Aviation Gasoline Gasoline. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms Gasoline also includes gasoline blendstocks, discussed later. Irs 2012 tax forms Aviation gasoline. Irs 2012 tax forms   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. Irs 2012 tax forms Taxable Events The tax on gasoline is $. Irs 2012 tax forms 184 per gallon. Irs 2012 tax forms The tax on aviation gasoline is $. Irs 2012 tax forms 194 per gallon. Irs 2012 tax forms When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. Irs 2012 tax forms 141 per gallon. Irs 2012 tax forms See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. Irs 2012 tax forms Tax is imposed on the removal, entry, or sale of gasoline. Irs 2012 tax forms Each of these events is discussed later. Irs 2012 tax forms Also, see the special rules that apply to gasoline blendstocks, later. Irs 2012 tax forms If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. Irs 2012 tax forms See Refunds of Second Tax in chapter 2. Irs 2012 tax forms Removal from terminal. Irs 2012 tax forms   All removals of gasoline at a terminal rack are taxable. Irs 2012 tax forms The position holder for that gasoline is liable for the tax. Irs 2012 tax forms Two-party exchanges. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. Irs 2012 tax forms 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. Irs 2012 tax forms The transaction is subject to a written contract. Irs 2012 tax forms Terminal operator's liability. Irs 2012 tax forms   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. Irs 2012 tax forms   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. Irs 2012 tax forms The terminal operator is a registrant. Irs 2012 tax forms The terminal operator has an unexpired notification certificate (discussed later) from the position holder. Irs 2012 tax forms The terminal operator has no reason to believe any information on the certificate is false. Irs 2012 tax forms Removal from refinery. Irs 2012 tax forms   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. Irs 2012 tax forms 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. Irs 2012 tax forms It is made at the refinery rack. Irs 2012 tax forms The refiner is liable for the tax. Irs 2012 tax forms Exception. Irs 2012 tax forms   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. Irs 2012 tax forms The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Irs 2012 tax forms The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Irs 2012 tax forms The removal from the refinery is by railcar. Irs 2012 tax forms The same person operates the refinery and the facility at which the gasoline is received. Irs 2012 tax forms Entry into the United States. Irs 2012 tax forms   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. Irs 2012 tax forms It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Irs 2012 tax forms It is not made by bulk transfer. Irs 2012 tax forms The enterer is liable for the tax. Irs 2012 tax forms Importer of record's liability. Irs 2012 tax forms   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. Irs 2012 tax forms   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Irs 2012 tax forms The importer of record has an unexpired notification certificate (discussed later) from the enterer. Irs 2012 tax forms The importer of record has no reason to believe any information in the certificate is false. Irs 2012 tax forms Customs bond. Irs 2012 tax forms   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. Irs 2012 tax forms Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Irs 2012 tax forms   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. Irs 2012 tax forms The position holder is liable for the tax. Irs 2012 tax forms The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Irs 2012 tax forms However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Irs 2012 tax forms Bulk transfers not received at approved terminal or refinery. Irs 2012 tax forms   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. Irs 2012 tax forms No tax was previously imposed (as discussed earlier) on any of the following events. Irs 2012 tax forms The removal from the refinery. Irs 2012 tax forms The entry into the United States. Irs 2012 tax forms The removal from a terminal by an unregistered position holder. Irs 2012 tax forms Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). Irs 2012 tax forms   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. Irs 2012 tax forms However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Irs 2012 tax forms The owner is a registrant. Irs 2012 tax forms The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. Irs 2012 tax forms The owner has no reason to believe any information on the certificate is false. Irs 2012 tax forms The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. Irs 2012 tax forms The operator is jointly and severally liable if the owner does not meet these conditions. Irs 2012 tax forms Sales to unregistered person. Irs 2012 tax forms   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. Irs 2012 tax forms   The seller is liable for the tax. Irs 2012 tax forms However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Irs 2012 tax forms   The seller is a registrant. Irs 2012 tax forms The seller has an unexpired notification certificate (discussed later) from the buyer. Irs 2012 tax forms The seller has no reason to believe any information on the certificate is false. Irs 2012 tax forms The buyer of the gasoline is liable for the tax if the seller meets these conditions. Irs 2012 tax forms The buyer is jointly and severally liable if the seller does not meet these conditions. Irs 2012 tax forms Exception. Irs 2012 tax forms   The tax does not apply to a sale if all of the following apply. Irs 2012 tax forms The buyer's principal place of business is not in the United States. Irs 2012 tax forms The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Irs 2012 tax forms The seller is a registrant and the exporter of record. Irs 2012 tax forms The fuel was exported. Irs 2012 tax forms Removal or sale of blended gasoline. Irs 2012 tax forms   The removal or sale of blended gasoline by the blender is taxable. Irs 2012 tax forms See Blended taxable fuel under Definitions, earlier. Irs 2012 tax forms   The blender is liable for the tax. Irs 2012 tax forms The tax is figured on the number of gallons not previously subject to the tax on gasoline. Irs 2012 tax forms   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. Irs 2012 tax forms See Form 720 to report this tax. Irs 2012 tax forms You also must be registered with the IRS as a blender. Irs 2012 tax forms See Form 637. Irs 2012 tax forms   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. Irs 2012 tax forms Notification certificate. Irs 2012 tax forms   The notification certificate is used to notify a person of the registration status of the registrant. Irs 2012 tax forms A copy of the registrant's letter of registration cannot be used as a notification certificate. Irs 2012 tax forms A model notification certificate is shown in the Appendix as Model Certificate C. Irs 2012 tax forms A notification certificate must contain all information necessary to complete the model. Irs 2012 tax forms   The certificate may be included as part of any business records normally used for a sale. Irs 2012 tax forms 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. Irs 2012 tax forms The registrant must provide a new certificate if any information on a certificate has changed. Irs 2012 tax forms Additional persons liable. Irs 2012 tax forms   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. Irs 2012 tax forms Gasoline Blendstocks Gasoline blendstocks may be subject to $. Irs 2012 tax forms 001 per gallon LUST tax as discussed below. Irs 2012 tax forms Gasoline includes gasoline blendstocks. Irs 2012 tax forms The previous discussions apply to these blendstocks. Irs 2012 tax forms However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. Irs 2012 tax forms 001 per gallon or are not subject to the excise tax. Irs 2012 tax forms Blendstocks. Irs 2012 tax forms   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. Irs 2012 tax forms   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. Irs 2012 tax forms Not used to produce finished gasoline. Irs 2012 tax forms   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. Irs 2012 tax forms Removals and entries not connected to sale. Irs 2012 tax forms   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. Irs 2012 tax forms Removals and entries connected to sale. Irs 2012 tax forms   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. Irs 2012 tax forms The person has an unexpired certificate (discussed later) from the buyer. Irs 2012 tax forms The person has no reason to believe any information in the certificate is false. Irs 2012 tax forms Sales after removal or entry. Irs 2012 tax forms   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. Irs 2012 tax forms The seller is liable for the tax. Irs 2012 tax forms However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. Irs 2012 tax forms The seller has an unexpired certificate (discussed next) from the buyer. Irs 2012 tax forms The seller has no reason to believe any information in the certificate is false. Irs 2012 tax forms Certificate of buyer. Irs 2012 tax forms   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. Irs 2012 tax forms The certificate may be included as part of any business records normally used for a sale. Irs 2012 tax forms A model certificate is shown in the Appendix as Model Certificate D. Irs 2012 tax forms The certificate must contain all information necessary to complete the model. Irs 2012 tax forms   A certificate expires on the earliest of the following dates. Irs 2012 tax forms The date 1 year after the effective date (not earlier than the date signed) of the certificate. Irs 2012 tax forms The date a new certificate is provided to the seller. Irs 2012 tax forms The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. Irs 2012 tax forms The buyer must provide a new certificate if any information on a certificate has changed. Irs 2012 tax forms   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. Irs 2012 tax forms Received at approved terminal or refinery. Irs 2012 tax forms   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. Irs 2012 tax forms The person is a registrant. Irs 2012 tax forms The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. Irs 2012 tax forms The person has no reason to believe any information on the certificate is false. Irs 2012 tax forms Bulk transfers to registered industrial user. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms Credits or Refunds. Irs 2012 tax forms   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. Irs 2012 tax forms For more information, see chapter 2. Irs 2012 tax forms Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. Irs 2012 tax forms 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. Irs 2012 tax forms Diesel fuel does not include gasoline, kerosene, excluded liquid, No. Irs 2012 tax forms 5 and No. Irs 2012 tax forms 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. Irs 2012 tax forms An excluded liquid is either of the following. Irs 2012 tax forms A liquid that contains less than 4% normal paraffins. Irs 2012 tax forms A liquid with all the following properties. Irs 2012 tax forms Distillation range of 125 degrees Fahrenheit or less. Irs 2012 tax forms Sulfur content of 10 ppm or less. Irs 2012 tax forms Minimum color of +27 Saybolt. Irs 2012 tax forms Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. Irs 2012 tax forms Kerosene. Irs 2012 tax forms   This means any of the following liquids. Irs 2012 tax forms One of the two grades of kerosene (No. Irs 2012 tax forms 1-K and No. Irs 2012 tax forms 2-K) covered by ASTM specification D3699. Irs 2012 tax forms 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). Irs 2012 tax forms See Kerosene for Use in Aviation, later. Irs 2012 tax forms   However, kerosene does not include excluded liquid, discussed earlier. Irs 2012 tax forms   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. Irs 2012 tax forms Diesel-powered highway vehicle. Irs 2012 tax forms   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. Irs 2012 tax forms Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. Irs 2012 tax forms For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. Irs 2012 tax forms 2) in chapter 2. Irs 2012 tax forms Diesel-powered train. Irs 2012 tax forms   This is any diesel-powered equipment or machinery that rides on rails. Irs 2012 tax forms The term includes a locomotive, work train, switching engine, and track maintenance machine. Irs 2012 tax forms Taxable Events The tax on diesel fuel and kerosene is $. Irs 2012 tax forms 244 per gallon. Irs 2012 tax forms It is imposed on the removal, entry, or sale of diesel fuel and kerosene. Irs 2012 tax forms Each of these events is discussed later. Irs 2012 tax forms Only the $. Irs 2012 tax forms 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. Irs 2012 tax forms 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. Irs 2012 tax forms See Refunds of Second Tax in chapter 2. Irs 2012 tax forms Use in certain intercity and local buses. Irs 2012 tax forms   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. Irs 2012 tax forms A claim for $. Irs 2012 tax forms 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. Irs 2012 tax forms An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Irs 2012 tax forms The bus must be engaged in one of the following activities. Irs 2012 tax forms Scheduled transportation along regular routes regardless of the size of the bus. Irs 2012 tax forms Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). Irs 2012 tax forms 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. Irs 2012 tax forms Removal from terminal. Irs 2012 tax forms   All removals of diesel fuel and kerosene at a terminal rack are taxable. Irs 2012 tax forms The position holder for that fuel is liable for the tax. Irs 2012 tax forms Two-party exchanges. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. Irs 2012 tax forms 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. Irs 2012 tax forms The transaction is subject to a written contract. Irs 2012 tax forms Terminal operator's liability. Irs 2012 tax forms   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). Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms The terminal operator is a registrant. Irs 2012 tax forms The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. Irs 2012 tax forms The terminal operator has no reason to believe any information on the certificate is false. Irs 2012 tax forms Removal from refinery. Irs 2012 tax forms   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. Irs 2012 tax forms 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. Irs 2012 tax forms It is made at the refinery rack. Irs 2012 tax forms The refiner is liable for the tax. Irs 2012 tax forms Exception. Irs 2012 tax forms   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. Irs 2012 tax forms The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Irs 2012 tax forms The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Irs 2012 tax forms 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. Irs 2012 tax forms Entry into the United States. Irs 2012 tax forms   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. Irs 2012 tax forms It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Irs 2012 tax forms It is not made by bulk transfer. Irs 2012 tax forms The enterer is liable for the tax. Irs 2012 tax forms Importer of record's liability. Irs 2012 tax forms   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. Irs 2012 tax forms   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Irs 2012 tax forms The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. Irs 2012 tax forms The importer of record has no reason to believe any information in the certificate is false. Irs 2012 tax forms Customs bond. Irs 2012 tax forms   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. Irs 2012 tax forms Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Irs 2012 tax forms   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. Irs 2012 tax forms The position holder is liable for the tax. Irs 2012 tax forms The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Irs 2012 tax forms However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Irs 2012 tax forms Bulk transfers not received at approved terminal or refinery. Irs 2012 tax forms   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. Irs 2012 tax forms No tax was previously imposed (as discussed earlier) on any of the following events. Irs 2012 tax forms The removal from the refinery. Irs 2012 tax forms The entry into the United States. Irs 2012 tax forms The removal from a terminal by an unregistered position holder. Irs 2012 tax forms 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). Irs 2012 tax forms   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. Irs 2012 tax forms However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Irs 2012 tax forms The owner is a registrant. Irs 2012 tax forms 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. Irs 2012 tax forms The owner has no reason to believe any information on the certificate is false. Irs 2012 tax forms The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. Irs 2012 tax forms The operator is jointly and severally liable if the owner does not meet these conditions. Irs 2012 tax forms Sales to unregistered person. Irs 2012 tax forms   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. Irs 2012 tax forms   The seller is liable for the tax. Irs 2012 tax forms However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Irs 2012 tax forms The seller is a registrant. Irs 2012 tax forms The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. Irs 2012 tax forms The seller has no reason to believe any information on the certificate is false. Irs 2012 tax forms The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. Irs 2012 tax forms The buyer is jointly and severally liable if the seller does not meet these conditions. Irs 2012 tax forms Exception. Irs 2012 tax forms   The tax does not apply to a sale if all of the following apply. Irs 2012 tax forms The buyer's principal place of business is not in the United States. Irs 2012 tax forms The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Irs 2012 tax forms The seller is a registrant and the exporter of record. Irs 2012 tax forms The fuel was exported. Irs 2012 tax forms Removal or sale of blended diesel fuel or kerosene. Irs 2012 tax forms   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. Irs 2012 tax forms Blended taxable fuel produced using biodiesel is subject to the tax. Irs 2012 tax forms See Blended taxable fuel under Definitions, earlier. Irs 2012 tax forms   The blender is liable for the tax. Irs 2012 tax forms The tax is figured on the number of gallons not previously subject to the tax. Irs 2012 tax forms   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. Irs 2012 tax forms Generally, the biodiesel mixture must be diesel fuel (defined earlier). Irs 2012 tax forms See Form 720 to report this tax. Irs 2012 tax forms You also must be registered by the IRS as a blender. Irs 2012 tax forms See Form 637 for more information. Irs 2012 tax forms   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. Irs 2012 tax forms Additional persons liable. Irs 2012 tax forms   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. Irs 2012 tax forms Credits or Refunds. Irs 2012 tax forms   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. Irs 2012 tax forms For more information, see chapter 2. Irs 2012 tax forms Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. Irs 2012 tax forms 001 per gallon LUST tax as discussed below, unless the fuel is for export. Irs 2012 tax forms 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. Irs 2012 tax forms The person otherwise liable for tax (for example, the position holder) is a registrant. Irs 2012 tax forms In the case of a removal from a terminal, the terminal is an approved terminal. Irs 2012 tax forms The diesel fuel or kerosene satisfies the dyeing requirements (described next). Irs 2012 tax forms Dyeing requirements. Irs 2012 tax forms   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. Irs 2012 tax forms It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. Irs 2012 tax forms 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. Irs 2012 tax forms Is indelibly dyed by mechanical injection. Irs 2012 tax forms See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. Irs 2012 tax forms Notice required. Irs 2012 tax forms   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. Irs 2012 tax forms   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. Irs 2012 tax forms   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). Irs 2012 tax forms That seller is subject to the penalty described next. Irs 2012 tax forms Penalty. Irs 2012 tax forms   A penalty is imposed on a person if any of the following situations apply. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. Irs 2012 tax forms 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. Irs 2012 tax forms   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Irs 2012 tax forms After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Irs 2012 tax forms   This penalty is in addition to any tax imposed on the fuel. Irs 2012 tax forms   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. Irs 2012 tax forms   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. Irs 2012 tax forms   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. Irs 2012 tax forms However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. Irs 2012 tax forms 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. Irs 2012 tax forms Exception to penalty. Irs 2012 tax forms   The penalty under item (3) will not apply in any of the following situations. Irs 2012 tax forms Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. Irs 2012 tax forms 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. Irs 2012 tax forms The alteration or attempted alteration occurs in an exempt area of Alaska. Irs 2012 tax forms See Removal for sale or use in Alaska, later. Irs 2012 tax forms 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. Irs 2012 tax forms Alaska and Feedstocks Tax of $. Irs 2012 tax forms 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). Irs 2012 tax forms Undyed kerosene used for feedstock purposes. Irs 2012 tax forms Removal for sale or use in Alaska. Irs 2012 tax forms   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. Irs 2012 tax forms The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. Irs 2012 tax forms 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. Irs 2012 tax forms In the case of a removal from a terminal, the terminal is an approved terminal. Irs 2012 tax forms 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. Irs 2012 tax forms   If all three of the requirements above are not met, then tax is imposed at $. Irs 2012 tax forms 244 per gallon. Irs 2012 tax forms   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. Irs 2012 tax forms Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. Irs 2012 tax forms Later sales. Irs 2012 tax forms   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. Irs 2012 tax forms The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. Irs 2012 tax forms However, the sale is not taxable (other than the LUST tax at $. Irs 2012 tax forms 001 per gallon) if all the following requirements are met. Irs 2012 tax forms The fuel is sold in Alaska for certain nontaxable uses. Irs 2012 tax forms The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. Irs 2012 tax forms The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. Irs 2012 tax forms Feedstock purposes. Irs 2012 tax forms   The $. Irs 2012 tax forms 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. Irs 2012 tax forms The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. Irs 2012 tax forms In the case of a removal from a terminal, the terminal is an approved terminal. Irs 2012 tax forms 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. Irs 2012 tax forms   If all of the requirements above are not met, then tax is imposed at $. Irs 2012 tax forms 244 per gallon. Irs 2012 tax forms   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. Irs 2012 tax forms For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. Irs 2012 tax forms A feedstock user is a person that uses kerosene for a feedstock purpose. Irs 2012 tax forms A registered feedstock user is a person that has been registered by the IRS as a feedstock user. Irs 2012 tax forms See Registration Requirements, earlier. Irs 2012 tax forms Later sales. Irs 2012 tax forms   The excise tax ($. Irs 2012 tax forms 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. Irs 2012 tax forms The tax is imposed at the time of the later sale and that seller is liable for the tax. Irs 2012 tax forms Certificate. Irs 2012 tax forms   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. Irs 2012 tax forms The certificate may be included as part of any business records normally used for a sale. Irs 2012 tax forms A model certificate is shown in the Appendix as Model Certificate G. Irs 2012 tax forms Your certificate must contain all information necessary to complete the model. Irs 2012 tax forms   A certificate expires on the earliest of the following dates. Irs 2012 tax forms The date 1 year after the effective date (not earlier than the date signed) of the certificate. Irs 2012 tax forms The date the seller is provided a new certificate or notice that the current certificate is invalid. Irs 2012 tax forms The date the seller is notified the buyer's registration has been revoked or suspended. Irs 2012 tax forms   The buyer must provide a new certificate if any information on a certificate has changed. Irs 2012 tax forms 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. Irs 2012 tax forms Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. Irs 2012 tax forms Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. Irs 2012 tax forms Any liquid other than gasoline, diesel fuel, or kerosene. Irs 2012 tax forms Generally, this back-up tax is imposed at a rate of $. Irs 2012 tax forms 244 per gallon. Irs 2012 tax forms Liability for tax. Irs 2012 tax forms   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. Irs 2012 tax forms 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. Irs 2012 tax forms Exemptions from the back-up tax. Irs 2012 tax forms   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. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms A reduced tax rate of $. Irs 2012 tax forms 198 per gallon is imposed on a diesel-water fuel emulsion. Irs 2012 tax forms 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. Irs 2012 tax forms 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 $. Irs 2012 tax forms 244 per gallon. Irs 2012 tax forms Credits or refunds. Irs 2012 tax forms   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. Irs 2012 tax forms Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. Irs 2012 tax forms 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). Irs 2012 tax forms For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. Irs 2012 tax forms 219. Irs 2012 tax forms The rate of $. Irs 2012 tax forms 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. Irs 2012 tax forms The airport terminal does not need to be a secured airport terminal for this rate to apply. Irs 2012 tax forms 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. Irs 2012 tax forms For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. Irs 2012 tax forms 044 per gallon. Irs 2012 tax forms For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. Irs 2012 tax forms 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. Irs 2012 tax forms See Terminal located within a secured area of an airport, later. Irs 2012 tax forms In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Irs 2012 tax forms 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 $. Irs 2012 tax forms 001. Irs 2012 tax forms There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Irs 2012 tax forms 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. Irs 2012 tax forms See Terminal located within a secured area of an airport, later. Irs 2012 tax forms In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Irs 2012 tax forms The position holder is liable for the $. Irs 2012 tax forms 001 per gallon tax. Irs 2012 tax forms For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. Irs 2012 tax forms 141 per gallon applies. Irs 2012 tax forms Certain refueler trucks, tankers, and tank wagons treated as terminals. Irs 2012 tax forms   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. Irs 2012 tax forms Such terminal is located within an area of an airport. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms Information reporting will be required by terminal operators regarding this provision. Irs 2012 tax forms 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. Irs 2012 tax forms Terminal located within a secured area of an airport. Irs 2012 tax forms   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. Irs 2012 tax forms 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. Irs 2012 tax forms 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 $. Irs 2012 tax forms 044 per gallon. Irs 2012 tax forms 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). Irs 2012 tax forms For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. Irs 2012 tax forms For the aircraft operator to be liable for the tax $. Irs 2012 tax forms 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. Irs 2012 tax forms Commercial aviation. Irs 2012 tax forms   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. Irs 2012 tax forms However, commercial aviation does not include any of the following uses. Irs 2012 tax forms Any use exclusively for the purpose of skydiving. Irs 2012 tax forms Certain air transportation by seaplane. Irs 2012 tax forms See Seaplanes under Transportation of Persons by Air in chapter 4. Irs 2012 tax forms Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. Irs 2012 tax forms For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. Irs 2012 tax forms 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. Irs 2012 tax forms For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. Irs 2012 tax forms Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. Irs 2012 tax forms See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. Irs 2012 tax forms 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 $. Irs 2012 tax forms 141 per gallon. Irs 2012 tax forms The fractional ownership program manager is liable for the tax. Irs 2012 tax forms The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. Irs 2012 tax forms If the surtax is imposed, the following air transportation taxes do not apply. Irs 2012 tax forms Transportation of persons by air. Irs 2012 tax forms Transportation of property by air. Irs 2012 tax forms Use of international air travel facilities. Irs 2012 tax forms These taxes are described under Air Transportation Taxes, later. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms Fractional program aircraft. Irs 2012 tax forms   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. Irs 2012 tax forms S. Irs 2012 tax forms   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. Irs 2012 tax forms In such situations, the flight is not commercial aviation. Irs 2012 tax forms Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. Irs 2012 tax forms Fractional owner. Irs 2012 tax forms   Any person owning any interest (including the entire interest) in a fractional program aircraft. Irs 2012 tax forms Dry lease aircraft exchange. Irs 2012 tax forms   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. Irs 2012 tax forms Special rule relating to deadhead service. Irs 2012 tax forms   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. Irs 2012 tax forms More information. Irs 2012 tax forms   See section 4043 for more information on the surtax. Irs 2012 tax forms 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. Irs 2012 tax forms Certificate. Irs 2012 tax forms   The certificate may be included as part of any business records normally used for a sale. Irs 2012 tax forms See Model Certificate K in the Appendix. Irs 2012 tax forms   A certificate expires on the earliest of the following dates. Irs 2012 tax forms The date 1 year after the effective date (not earlier than the date signed) of the certificate. Irs 2012 tax forms The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. Irs 2012 tax forms The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. Irs 2012 tax forms   The buyer must provide a new certificate if any information on a certificate has changed. Irs 2012 tax forms   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. Irs 2012 tax forms Exempt use. Irs 2012 tax forms   The rate on kerosene for use in aviation is $. Irs 2012 tax forms 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. Irs 2012 tax forms An exempt use includes kerosene for the exclusive use of a state or local government. Irs 2012 tax forms There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Irs 2012 tax forms Flash title transaction. Irs 2012 tax forms   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. Irs 2012 tax forms 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. Irs 2012 tax forms 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. Irs 2012 tax forms Reseller statement. Irs 2012 tax forms   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. Irs 2012 tax forms Credits or Refunds. Irs 2012 tax forms   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). Irs 2012 tax forms A claim may be made by a registered ultimate vendor for certain sales. Irs 2012 tax forms For more information, see chapter 2. Irs 2012 tax forms Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. Irs 2012 tax forms Other Fuels include alternative fuels. Irs 2012 tax forms 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. Irs 2012 tax forms Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. Irs 2012 tax forms Qualified methanol and ethanol fuels. Irs 2012 tax forms   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. Irs 2012 tax forms The tax rates are listed in the Instructions for Form 720. Irs 2012 tax forms Partially exempt methanol and ethanol fuels. Irs 2012 tax forms   A reduced tax rate applies to these fuels. Irs 2012 tax forms Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. Irs 2012 tax forms The tax rates are listed in the Instructions for Form 720. Irs 2012 tax forms Motor vehicles. Irs 2012 tax forms   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. Irs 2012 tax forms They are propelled by a motor. Irs 2012 tax forms They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t