[Federal Register Volume 66, Number 205 (Tuesday, October 23, 2001)]
[Proposed Rules]
[Pages 53564-53565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26571]



Internal Revenue Service

26 CFR Part 48

RIN 1545-BA27

Gasoline Tax Claims Under Section 6416(a)(4)

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Advance notice of proposed rulemaking.


SUMMARY: This document invites comments from the public on issues that 
the IRS may address in proposed regulations relating to claims for 
credits or refunds of the gasoline tax. All materials submitted will be 
available for public inspection and copying.

DATES: Written and electronic comments must be received by January 22, 

ADDRESSES: Send submissions to: CC:ITA:RU (REG-143219-01), room

[[Page 53565]]

5226, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered Monday through 
Friday between the hours of 8 a.m. and 5 p.m. to: CC:ITA:RU (REG-
143219-01), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC. Alternatively, taxpayers may send 
submissions electronically via the Internet by selecting the ``Tax 
Regs'' option on the IRS Home Page, or directly to the IRS Internet 
site at http://www.irs.gov/tax__regs/regslist.html.

FOR FURTHER INFORMATION CONTACT: Concerning submissions, the 
Regulations Unit, (202) 622-7180; concerning the proposals, Frank 
Boland, (202) 622-3130 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: Under section 6416(b)(2), the person that 
paid the gasoline tax imposed by section 4081 to the government may 
receive a credit or refund of the amount of the tax if the gasoline is, 
by any person, exported, used or sold for use as supplies for vessels 
or aircraft, sold to a state or local government for its exclusive use, 
sold to a nonprofit educational organization for its exclusive use, or 
used or sold for use in the production of special fuels (exempt 
    Section 6102 of the Technical and Miscellaneous Revenue Act of 1988 
(the 1988 Act) (Public Law 100-647, 102 Stat. 3342) added section 
6416(a)(4) to the Internal Revenue Code. Under section 6416(a)(4)(A), a 
wholesale distributor (described in section 6416(a)(4)(B)) that buys 
gasoline on which the tax imposed by section 4081 has been paid and 
sells the gasoline to its ultimate purchaser for an exempt purpose is 
treated as the person (and the only person) that paid the tax to the 
government and thus is the person eligible to claim a credit or refund 
of that tax.
    Section 6416(a)(4)(B), as added by the 1988 Act, provides that the 
term wholesale distributor includes any person that sells gasoline to 
producers, retailers, or to users that purchase in bulk quantities and 
accept delivery into bulk storage tanks. For this purpose, the term 
producer includes a refiner, blender, or wholesale distributor of 
gasoline, or a dealer selling gasoline exclusively to producers of 
gasoline. The term wholesale distributor does not include any person 
that is an importer, refiner, or blender of gasoline, or is a dealer 
selling gasoline exclusively to producers. Section 905 of the Taxpayer 
Relief Act of 1997 (Public Law 105-34, 111 Stat. 788) amended section 
6416(a)(4)(B) of the Code by providing that the term wholesale 
distributor also includes any person that makes retail sales of 
gasoline at 10 or more retail motor fuel outlets.
    Notice 89-29 (1989-1 C.B. 669) provides rules for implementing 
section 6416(a)(4), as added by the 1988 Act. These include rules that 
allow claims by the person that actually paid the tax to the government 
instead of claims by the wholesale distributor if (1) tax is not 
included in the price of the gasoline bought by the wholesale 
distributor or (2) the sale by the wholesale distributor is charged on 
an oil company credit card issued to an exempt person.
    In response to questions that have arisen concerning the 
application of the rules in Notice 89-29, the IRS is considering 
proposing regulations under section 6416(a)(4) that, when finalized, 
would replace the guidance provided by Notice 89-29. The IRS invites 
comments from the public on issues that should be addressed in the 
regulations, including issues relating to refund claims by persons 
other than the wholesale distributor.

Paul Kugler,
Associate Chief Counsel (Passthroughs and Special Industries).
[FR Doc. 01-26571 Filed 10-22-01; 8:45 am]