IRS Experiencing Delays Processing Motor Fuel Excise Tax, Biodiesel, Alternative Fuel Mixture Claims

PMAA last week expressed concern to the IRS over the lengthy delays many fuel marketers and heating fuel dealers are experiencing with the processing of their motor fuel excise tax and blender mixture credit claims.

According to the IRS, the claims process has been slowed significantly by the COVID-19 emergency. A larger than normal number of IRS claim processing employees are either ill, in quarantine or caring for ill family members.

The claims affected by the processing delay include:

— IRS Form 8849, Claim of Refund of Excise Taxes

— IRS Form 720 Schedule C, Biodiesel & Alternative Fuel Credits (taken against existing FET liability)

— IRS Form 8864, Biodiesel and Renewable Diesel Mixture Credit (credit for tax year in which the sale or use occurred)

— IRS Form 6426, Alternative Fuel Mixture Credit (credit for tax year in which the sale or use occurred)

— IRS Form 4136, Credit for Excise Tax Paid on Fuel (credit for current income tax year)

The IRS explained there is no way for taxpayers to track the progress of their claims at this time. Claims are processed in the order in which they were received on a first-in/first-out basis.

Processing is currently running 2 to 3 weeks behind schedule, sometimes longer according to the IRS. The IRS is urging patience and expects the backlog to be cleared up shortly.

In the meantime, PMAA reminds marketers that the IRS must pay interest on claims sent by mail that are not paid 45 days after receipt or 20 days in the case of claims sent electronically.

By law, the interest rate the IRS must pay on both overpayment and underpayment of tax is adjusted quarterly.

 For the second quarter, which ends on June 30, 2020, the interest rate is 5 percent per year, compounded daily. For the third quarter, which ends on September 30, 2020, the interest rate is 3 percent per year, compounded daily.

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