Rev. Rul. 85-80

1985-1 C.B. 360, 1985-24 I.R.B. 13.

GASOLINE TAX DEPOSITS; SAFE-HAVEN FOLLOW-UP DEPOSITS

Published: June 17, 1985

Section 6302.-Mode or Time of Collection., 26 CFR 48.6302(c)-1: Use of government depositories.

  Gasoline tax deposits; safe-haven follow-up deposits. The 14-day deposit rule under section 145.3-1(a) of the temporary regulations does not apply to the follow-up deposits required under the safe-haven rules of section 48.6302(c)- 1(a)(1)(ii) of the regulations.

ISSUE

  Does the 14-day deposit rule for semimonthly deposits of excise tax by qualified persons also apply to deposits of underpayments for a particular month made to satisfy the depositary requirements of section 48.6302(c)- 1(a)(1)(ii) of the Manufacturers and Retailers Excise Tax Regulations?

LAW AND ANALYSIS

  Section 4081(a) of the Internal Revenue Code imposes a tax on the sale by the producer or importer of gasoline.

  Section 6302(c) of the Code authorizes the use of government depositaries to receive tax imposed under the internal revenue laws.

  Section 48.6302(c)-1(a)(1)(ii) of the regulations generally requires any person whose total excise tax liability for all excise taxes reportable on Form 720, Quarterly Federal Excise Tax Return, for any calendar month in the preceding calendar quarter exceeded $2,000 to deposit the excise taxes to which Part 48 relates for a semimonthly period on or before the 9th day of the semimonthly period following the semimonthly period for which the taxes are reportable. A person will be considered to have met the depositary requirement if,

  (a)(1) The deposit for that semimonthly period is not less than 90 percent of the total amount of the excise taxes (to which Part 48 and Part 46 (relating to miscellaneous excise taxes) relate) reportable by the person on Form 720 for that semimonthly period, and (2) if that semimonthly period occurs in a month other than the last month in a calendar quarter, the person deposits any underpayment for that month by the 9th day of the second month following that month; or

  (b)(1) The deposit for each semimonthly period in the month is not less than 45 percent of the total amount of the excise taxes (to which Part 48 and Part 46 relate) reportable by the person on Form 720 for that month, and (2) if that month is other than the last month in a calendar quarter, the person deposits any underpayment for that month by the 9th day of the second month following that month; or

  (c)(1) The deposit for each semimonthly period in the month is not less than 50 percent of the total amount of the excise taxes (to which Part 46 and Part 48 relate) reportable by the person on Form 720 for the second preceding calendar month, and (2) if that month is other than the last month in a calendar quarter, the person deposits any underpayment for that month by the 9th day of the second month following that month; or if

  (d)(1) The requirements of (a)(1), (b)(1), or (c)(1) are satisfied for the first semimonthly period of a calendar month, (2) the deposit for the second semimonthly period of the month is, when added to the deposit for the first semimonthly period, not less than 90 percent of the total amount of excise taxes (to which Part 48 relates) reportable by the person on Form 720 for such month, and (3) if that month is other than the last month of a calendar quarter, the person deposits any underpayment for that month by the 9th day of the second month following that month.

  Section 48.6302(c)-1(b)(1) of the regulations defines 'semimonthly period' as the first 15 days of a calendar month or the portion of a calendar month following the 15th day of such month.

  Section 518(a) of the Highway Revenue Act of 1982, Pub. L. No. 97-424, 1983-1 C.B. 405, as amended by section 734(i) of the Tax Reform Act of 1984, Pub. L. No. 98-369, 98 Stat. 494 (1984), 1984-3 C.B. (Vol. 1) 1, 488, provides that the Secretary shall prescribe regulations which permit any qualified person whose liability for tax under section 4081 of the Code is payable with respect to semimonthly periods to pay such tax on or before the day which is 14 days after the close of such semimonthly period if such payment is made by wire transfer to, except as provided in regulations prescribed by the Secretary of the Treasury or his delegate, any Federal Reserve Bank.

  Section 145.3-1(a) of the Temporary Regulations under the Highway Revenue Act of 1982 provides that for qualified persons whose liability for tax under section 4081 of the Code arises after March 31, 1983, and is payable with respect to semimonthly periods, the due date for each payment is 14 days after the close of the semimonthly period if the payment is made by wire transfer to any government depositary. [FN1] Under section 145.3-1(b) of the regulations a qualified person is any person whose average daily production of crude oil for the preceding calendar quarter does not exceed 1000 barrels or any independent refiner within the meaning of section 4995(b)(4) of the Code and section 51.4996-1(h) of the regulations. The definition of 'qualified person' contained in section 145.3-1(b) includes persons with no crude oil production as well as those with 1000 or fewer barrels of production.

  Thus, the normal semimonthly deposit date for excise taxes is 9 days after the end of the semimonthly period, unless the taxpayer is a qualified producer of gasoline in which case the semimonthly deposit is due 14 days after the end of the semimonthly period if the deposit is made by wire transfer to a government depository. The purpose for the additional 5 days in the case of a qualified producer is to make the deposit date for the gasoline tax correspond more closely with the date on which payment for the gasoline is generally received by the producer. Section 518(a) of the Highway Revenue Act, the conference report on section 518 (H.R. Rep. No. 97-987 (Conf. Rep.), 97th Cong., 2d Sess. 178 (1982), 1983-1 C.B. 434, 436), and the regulations interpreting section 518 focus only on the semimonthly payment period and provide no indication of any intent to extend the time for making the follow-up deposit. The follow-up deposit, which is used to make up an underpayment for a particular month, is not due until well after the date on which payment for the gasoline is received by the producer. As a result, there is no need for the additional 5 days to make the deposit. The follow-up deposit is not a semimonthly deposit for purposes of section 145.3-1(a) of the regulations. Therefore, the rule of section 48.6302(c)-1(a)(1)(ii) applies.

HOLDING

  The 14-day deposit rule does not apply to deposits of underpayments for a particular month made to satisfy the depository requirements of section 48.6302(c)-1(a)(1)(ii) of the regulations.

FN1. The amendment made by the Tax Reform Act added the limitation that wire transfers be made only to a Federal Reserve Bank. However, pending publication of regulations addressing the amendment, the Service is continuing to accept deposits made with any government depositary as provided by section 145.3-1(a) of the regulations as announced in News Release IR-84-80, July 23, 1984.

Rev. Rul. 85-80, 1985-1 C.B. 360, 1985-24 I.R.B. 13.