K: Buyer of kerosene for a feedstock purpose. The kerosene tax on kerosene does not apply if, among other conditions, the buyer of the kerosene for feedstock purposes is registered. See Treas. Reg. §48.4082-7(b).

M: Blender of gasoline, diesel fuel (including a diesel-water fuel emulsion), or kerosene, producing a taxable fuel outside the bulk transfer/terminal system, including blenders of alcohol fuel mixtures, biodiesel mixtures, and renewable diesel mixtures. Registration as a blender does not allow a person to buy any fuel tax-free. See Treas. Reg. §48.4081-1(b). The American Jobs Creation Act of 2004 (PL. 108-357) eliminated activity letter T. This person is required to be registered. See Treas. Reg. §48.4081-1(b).

S: Enterer, position holder, refiner, terminal operator, or throughputter of gasoline, diesel fuel (including a diesel-water fuel emulsion), or kerosene, or industrial user of gasoline. Each enterer, refiner, position holder, terminal operator, and throughputter (that is a position holder) is required to be registered. See Treas. Reg. §48.4081-1(b).

W: Operator (other than state or local government) of a diesel-powered train. The tax on diesel fuel used in trains has been eliminated, except for the 0.1 cent per gallon LUST tax. See IRC 4041(d)(3).

An applicant meets the activity test only if it is determined that the applicant: (i) is, in the course of its trade or business, regularly engaged as an operator of a bus or train or in the characteristic activity of a blender, enterer, feedstock user, industrial user, refiner, terminal operator, position holder, or throughputter; or (ii) is likely to be (because of such factors as the applicant’s business experience, financial standing, or trade connections), in the course of its trade or business, regularly engaged as an operator of a train or in the characteristic activity of a blender, enterer, feedstock user, industrial user, refiner, terminal operator, position holder, or throughputter within a reasonable time after becoming registered.

A review of the applicant’s business operations will be made to verify that the applicant is regularly engaged, or will be regularly engaged, within a reasonable time, in the activity for which the registration is being requested. Examples of items that may be inspected include contracts or agreements, copies of Form 720, state licenses, etc. If necessary, customers and suppliers of the applicant may be contacted.

See Treas. Reg. §48.4081-1 for definitions of the terms blender, enterer, industrial user, operator of a diesel-powered train, refiner, terminal operator, throughputter, and position holder.

See Treas. Reg. §48.4081-6(b)(3) for definition of the term "gasohol blender" .

See Treas. Reg. §48.4082-7(b) for definition of the term " feedstock user" .

An applicant meets the acceptable risk test only if it is determined that: (i) neither the applicant nor a related person has been penalized for a wrongful act; or (ii) even though the applicant or a related person has been penalized for a wrongful act, the Chief, Excise Tax Program or his delegate determines, after review of evidence offered by the applicant, that the registration of the applicant does not create a significant risk of nonpayment or late payment of the tax imposed by IRC 4041(a)(1) and 4081.

In making the determination whether an applicant does not create a significant risk of nonpayment or late payment of tax, consider factors such as (i) the time elapsed since the applicant or related person was penalized for a wrongful act; (ii) the present relationship between the applicant and any related person that was penalized for any wrongful act; (iii) the degree of rehabilitation of the person penalized for any wrongful act; and (iv) the amount of bond given by the applicant. In his regard, the Chief, Excise Tax Program or his delegate may accept a bond in any amount.

Wrongful Act. A person has been penalized for a wrongful act if the person has: (i) been assessed any penalty under Chapter 68 of the Internal Revenue Code (or similar provision of the law of any State) for fraudulently failing to file any return or pay any tax, and the penalty has not been wholly abated, refunded, or credited; (ii) been assessed any penalty under Chapter 68 of the Internal Revenue Code and such penalty has not been wholly abated, refunded or credited, and the Chief, Excise Tax Program or his delegate determines that the conduct resulting in the penalty is part of a consistent pattern of failing to deposit, pay, or pay over a substantial amount of tax; (iii) been convicted of a crime under Chapter 75 of the Internal Revenue Code (or similar provision of the law of any State), or of conspiracy to commit such a crime, and the conviction has not been wholly reversed by a court of competent jurisdiction; (iv) been convicted, under the laws of the United States or any State, of a felony for which an element of the offense is theft, fraud, or the making of false statements, and the conviction has not been wholly reversed by a court of competent jurisdiction; (v) been assessed any tax under IRC 4103 and the tax has not been wholly abated, refunded, or credited; or (vi) had its registration under IRC 4101 or 4222 revoked.

A related person is a person that: (i) directly or indirectly exercises control over an activity of the applicant; (ii) owns, directly or indirectly, five percent or more of the applicant; (iii) is under a duty to assure the payment of a tax for which the applicant is responsible; (iv) is a member, with the applicant, of a group of organizations (as defined in Treas. Reg. Section 1.52-1(b) that would be treated as a group of trades or businesses under common control for purposes of Section 1.52-1; or (v) distributed or transferred assets to the applicant in a transaction in which the applicant’s basis in the assets is determined by reference to the basis of the assets in the hands of the distributor or transferor.

Sources of information that may help identify wrongful acts include: (i) transcripts of the applicant and related persons: (ii) Criminal Investigation Division; (iii) television or newspaper articles; (iv) state or local law enforcement agencies; and (v) Form 637 registration files.

Sources of information concerning risk of late or nonpayment of tax include: (i) transcripts of the applicant’s tax payment history, (ii) state tax information, (iii) bankruptcy records, and (iv) the applicant’s financial records.

An applicant meets the adequate security test only if it is determined that the applicant has both adequate financial resources and a satisfactory tax history, or the applicant gives an adequate bond.

An applicant has adequate financial resources only if it is determined that the applicant is financially capable of paying: (i) its expected tax liability under IRC 4041(a)(1) and 4081 for a representative 6 month period (as determined by the Chief, Excise Tax Program or his delegate); (ii) in the case of a terminal operator, the expected tax liability under Section 4081 of persons other than the terminal operator with respect to taxable fuel removed at the racks of its terminals during a representative 1 month period (as determined by the Chief, Excise Tax Program or his delegate) and; (iii) in the case of a gasohol blender, the gasohol bonding amount. This amount is the product of the rate of tax applicable to later separation, as described in Treas. Reg. Section 48.4081-6(f)(1)(iii), and the total number of gallons of gasoline expected to be bought at the gasohol production tax rate by the gasohol blender during a representative 6 month period (as determined by the Chief, Excise Tax Program or his delegate).

The determination of whether an applicant has adequate financial resources must be based on financial information such as the applicant’s income statement, balance sheet or bond ratings, or other information related to the applicants financial status.

An applicant has a satisfactory tax history only if they have no outstanding non-addressed federal tax liability of any kind and the Chief, Excise Tax Program or his delegate is satisfied with the filing, deposit, and payment history for all federal taxes of the applicants' and any related person. Complete transcripts or other equivalent research will be used for this purpose.

To meet the acceptable risk test - if the applicant or a related person has been penalized for a wrongful act and it is determined that a bond is necessary to show that the applicant does not represent a significant risk of nonpayment or late payment of tax; or

To meet the adequate security test - if it is determined that the applicant does not have adequate financial resources and a satisfactory tax history.

The applicant’s expected tax liability under IRC 4041(a)(1) and 4081 for a representative 6-month period;

In the case of a Terminal Operator, the expected tax liability of persons other than the Terminal Operator under IRC 4081 with respect to taxable fuel removed at the racks of its terminals (determined as if all removals of taxable fuel were taxable) during a representative 1 month period; and

In the case of a gasohol blender, the gasohol bonding amount. See Treas. Reg. Section 48.4101-1(b)(3) which states that the gasohol bonding amount is the product of: The rate of tax applicable to later separation, as described in Treas. Reg. Section 48.4081-6(f)(1)(iii), and the total number of gallons of gasoline expected to be bought at the gasohol production tax rate by the gasohol blender during a representative 6 month period (as determined by the Chief, Excise Tax Program or his delegate).

A public debt obligation of the United States Government.

An obligation the principal and interest of which are unconditionally guaranteed by the United State Government.

A bond executed by a surety company listed in Department of the Treasury Circular 570, as an acceptable surety or reinsurer of federal bonds (Circular 570, which may be found at http://fms.treas.gov/c570/c570_a-z.html , is usually printed each year in the July 1 edition of the Federal Register).

Any other bond with security (including liens under IRC 4101(b)(1)(B) considered acceptable by the Chief, Excise Tax Program or his delegate.

AB: Producers and Importers of agri-biodesel.

AF: Producers and Importers of alcohol. See Treas. Reg. §48.4081-6(b)(1).

AL: Alternative Fueler that sells for use or uses alternative fuel as a fuel in a motor vehicle or motorboat.

AM: Alternative Fueler that produces an alternative fuel mixture that is sold for use or used in the alternative fueler’s trade or business.

BC: Qualified blood collector organization buying taxable fuel, taxable tires, and certain heavy vehicles; claiming exemption from the communications tax and heavy highway vehicle use tax: or to claim a credit or payment of certain excise taxes; for its exclusive use in the collection, storage, or transportation of blood.

CC: Credit Card Issuer that issues credit cards for sales of taxable fuel to a state or local government for its exclusive use or for sales of gasoline to a nonprofit educational organization for its exclusive use.

NB: Producers and Importers of biodiesel (other than agri-biodiesel) and renewable diesel.

UA: Ultimate Vendor that sells aviation-grade kerosene for use in aviation.

UB: Ultimate Vendor that sells undyed diesel fuel or undyed kerosene for use in certain intercity and local buses.

UP: Ultimate vendor that sells kerosene from a blocked pump, as defined in Treas. Reg. §48.6427-10(b).

UV: Ultimate Vendor that sells (a) undyed diesel fuel or undyed kerosene to a state or local government for its exclusive use, or (b) gasoline (including aviation gasoline) to a state or local government for its exclusive use or to a nonprofit educational organization for its exclusive use, as defined in Treas. Reg. §48.6427-9(b)(1).

X: Pipeline Operator, as defined in Treas. Reg. §48.4101-1(b)(7) or Vessel Operator, as defined in Treas. Reg. §48.4101-1(b)(8). Registration does not allow this person to buy any taxable fuel tax-free. Registration of pipeline and vessel operators allows the IRS to identify persons that transport taxable fuel within the bulk transfer/terminal system.

Activity test- An applicant meets the activity test for a AB, AF, AL, AM, BC, CC, NB, UA, UB, UP, UV, and X only if it is determined that the applicant is, in the course of its trade or business, regularly engaged in the characteristic activity of a person described in IRM 4.24.2.7.2.1; or is likely to be (because of such factors as the applicant's business experience, financial standing, or trade connections), in the course of its trade or business, regularly engaged in the characteristic activity of a person described in IRM 4.24.2.7.2.1. within a reasonable time after becoming registered under IRC 4101. See Treas. Reg. §48.4101-1(f)(2) and IRM 4.24.2.7.1.3.

An applicant has a satisfactory tax history only if they have no outstanding, non-addressed federal tax liability of any kind and the Chief, Excise Tax Program or his delegate is satisfied with the filing, deposit, and payment history for all federal taxes of the applicant and any related person. Complete transcripts or other equivalent research will be used for this purpose. See Treas. Reg. §48.4101-1(f)(4)(iii).

The registration requirements for fuels and fuel additives established by the Environmental Protection Agency under Section 211 of the Clean Air Act (42 USC. 7545); and

The requirements of the American Society of Testing and Materials D6751.of to ensure that biodiesel producer applicants and registrants are adhering to the ASTM requirement for biodiesel.

Activity Test- An applicant meets the activity test for a Y only if it is determined that the applicant is in the course of its trade or business, engaged as an importer or producer of aviation fuel or a buyer of aviation fuel for use in commercial aviation or is likely to be (because of such factors as the applicant’s business experience, financial standing, or trade connections), in the course of its trade or business, engaged as an importer or producer of aviation fuel or a buyer of aviation fuel for use in commercial aviation within a reasonable time after becoming registered.

An applicant has a satisfactory tax history only if they have no outstanding non-addressed federal tax liability of any kind and the Chief, Excise Tax Program or his delegate is satisfied with the filing, deposit, and payment history for all federal taxes of the applicant and any related person. Complete transcripts or other equivalent research will be used for this purpose. If the applicant’s tax history is not satisfactory, or if no such history exists (for example in the case of a newly created business), a bond will be required. See IRM 4.24.2.7.3.4.

$500,000 or

the amount of tax that would be imposed by IRC 4091 on the expected volume of aviation fuel that will be used or sold by the applicant during a representative one month period as if all of the applicant’s sales of aviation fuel were taxable.

A: Manufacturer of gas-guzzler automobiles, sport fishing equipment (including fishing rods and fishing poles), fishing tackle boxes, bows, quivers, broadheads, points, arrow shafts, taxable tires, or vaccines.

B: Buyer of sport fishing equipment, gas-guzzler automobiles, bows, arrow components, or vaccines for further manufacture or for resale to a buyer for further manufacture.

C: Buyer of tires for use on or in connection with the sale of another article the buyer manufacturers and sells (1) for export, (2) to state and local governments, (3) to nonprofit educational organizations, or (4) as supplies for vessels or aircraft.

D: Buyer with a place of business in the United State buying vaccines, gas guzzler automobiles, tires, sport fishing equipment, bows, arrow components, or luxury passenger vehicles for export or for resale to a second purchaser for export.

E: Buyer (other than state or local government) of gas guzzler automobiles for ambulance, law enforcement, or fire fighting.

F: Nonprofit educational organization, other than a public school, buying tires, certain heavy vehicles, sport fishing equipment, bows, or arrow components for its exclusive use, intercity, local or school bus.

I: Buyer (other than nonprofit educational organization or state or local government) of tires for use on certain intercity, local or school buses.

Q: First retail seller of certain heavy vehicles making tax-free sales.

V: Manufacturer, importer, or buyer of ozone-depleting chemicals (ODC’s) for export.

Activity Test- An applicant meets the activity test for an A, B, C, D, E, F, I, Q, and V only if it is determined that the applicant is, in the course of its trade or business, regularly engaged in the characteristic activity of a person described in IRM 4.24.2.7.4.1 ; or is likely to be (because of such factors as the applicant’s business experience, financial standing, or trade connections), in the course of its trade or business regularly engaged in the characteristic activity of a person described in IRM 4.24.2.7.4.1. within a reasonable time after becoming registered.

An applicant has a satisfactory tax history only if they have no outstanding non-addressed Federal tax liability of any kind and the Chief, Excise Tax Program is satisfied with the filing, deposit, and payment history for all federal taxes of the applicant and any related person. Complete transcripts or other equivalent IDRS research will be used for this purpose. See (5)(b) of IRM 4.24.2.7.