IRS issues interim guidance on backlog of fuel credit claims
TAX ALERT |
Authored by RSM US LLP
On Dec. 9, 2020 the IRS Small Business/Self Employed (SBSE) Division issued a memorandum on new interim guidance to the Cincinnati campus excise tax operations for processing interest bearing fuel excise tax claims for end user and some ultimate vendors. The purpose of the guidance is to help alleviate the backlog of end-user fuel credit claims, which accrue interest after being unpaid for 45 days. Due to COVID-19, a backlog of 7,405 interest bearing fuel claims requiring interest have not been processed yet by the IRS. This includes one-time claims filed on IRS Form 8849 related to the alternative fuel credit and biodiesel mixture credit pursuant to Notice 2020-8.
The recommended actions for processing the backlog of fuel credit claims is to first process the principal amount of the claim via normal Master File Transaction procedures. The taxpayer will then receive a 76C letter explaining the current payment of principal and interest to be paid at a later date. Manual refunds will be prepared in order to calculate the interest on principal and interest due. IRS excise operations personnel will verify and track the manual refund interest payment with their associated principal-paid fuel claims.
The memo proposes using normal manual refund procedures for large dollar claims. Large dollar claims are those over $10 million for individuals or $100 million of businesses.
Many taxpayers are reporting delays in receiving their fuel credit claims – including retroactive 2018-2019 one-time claims for the alternative fuel credit and biodiesel mixture credit. The IRS guidance is intended to streamline the payment process of such claim to ensure that at least the principal of the claim is paid.
Taxpayers who submitted their fuel credit claims can anticipate further delays in processing due to COVID but should be aware that the IRS is trying a workaround to reduce its backlog. Taxpayers whose claims were submitted and still do not have their credits after 45 days should know that they are entitled to interest on these claims.
Call us at (800) 627-0636 or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by Debbie Gordon, Trina Pinneau and originally appeared on 2020-12-15.
2020 RSM US LLP. All rights reserved.
The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Lewis, Hooper & Dick, LLC is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Lewis, Hooper & Dick, LLC can assist you, please call 1-800-627-0636.