Par. 20. Sections 48.6426-1 through 48.6426-7 are added to read as follows:
(a) Overview. This section provides rules under which a biodiesel mixture producer may claim an excise tax credit under section 6426, a payment under section 6427, or an income tax credit under section 34. These claims relate to the mixture producer's sale or use of a biodiesel mixture and are based on the amount of biodiesel used to produce the biodiesel mixture. For the applicable claim rate, see section 6426.
(b) Conditions to allowance —(1) Excise tax credit. A claim for the biodiesel mixture credit with respect to a biodiesel mixture is allowed under section 6426 only if each of the following conditions is satisfied:
(i) The claimant produced the biodiesel mixture for sale or use in the trade or business of the claimant.
(ii) The claimant sold the biodiesel mixture for use as a fuel or used the biodiesel mixture as a fuel.
(iii) The claimant—
(A) Produced the biodiesel in the mixture; or
(B) Has obtained a certificate from the registered biodiesel producer as described in paragraph (e) of this section and, if applicable, a statement described in paragraph (f) of this section, for such biodiesel and has no reason to believe any information in the certificate and statement is false.
(iv) The claimant has made no other claim with respect to the biodiesel in the mixture or, if another claim has been made, such other claim is disregarded under this paragraph (b)(1)(iv). A claim is disregarded under this paragraph (b)(1)(iv) if it is—
(A) A claim for the small agri-biodiesel producer credit under section 40A; or
(B) An erroneous claim under section 6427 and either the claim has been disallowed or the claimant has repaid the government the amount received under section 6427 with interest.
(v) The claimant has filed a timely claim on Form 720, “Quarterly Federal Excise Tax Return,” that contains all the information required in paragraph (c) of this section.
(2) Payment or income tax credit. A claim for a biodiesel mixture payment under section 6427 or an income tax credit under section 34 is allowed only if—
(i) The conditions of paragraphs (b)(1)(i), (ii), and (iii) of this section are met; and
(ii) The claimant has filed a timely claim for payment on Form 720 or Form 8849, “Claim for Refund of Excise Tax,” or for a credit on Form 4136, “Credit for Federal Tax Paid on Fuels,” that contains all the information required by paragraph (c) of this section.
(3) Overall limitations on credits and payments. See § 48.6426-7(a) for overall limitations on credits and payments allowed with respect to mixtures under sections 34, 6426, and 6427.
(c) Content of claim. Each claim for a biodiesel mixture credit or payment must contain the following information with respect to the mixture covered by the claim:
(1) The amount of agri-biodiesel and biodiesel other than agri-biodiesel in the biodiesel mixture.
(2) Unless the claimant is the producer of the biodiesel in the biodiesel mixture, a copy of the applicable Certificate for Biodiesel described in paragraph (e) of this section and Statement(s) of Biodiesel Reseller described in paragraph (f) of this section. In the case of a certificate and statement that support a claim made on more than one claim form, the certificate and statement are to be included with the first claim and the claimant is to provide information related to the certificate and statement on any subsequent claim in accordance with the instructions applicable to the claim form.
(3) A statement that the conditions to allowance described in paragraph (b) of this section have been met.
(4) A statement that the claimant either—
(i) Is a registered biodiesel producer and produced the biodiesel it used in the mixture; or
(ii) Has in its possession a record of the name, address, and employer identification number of the person(s) that sold the biodiesel to the claimant and the date of purchase.
(d) Commingled biodiesel; accounting method. For purposes of determining the certificate applicable to commingled biodiesel, a person that holds commingled biodiesel may identify the biodiesel it sells or uses by any reasonable method, including the first-in, first-out method applied either on a tank-by-tank basis or on an aggregate basis to all commingled biodiesel the person holds.
(e) Certificate for Biodiesel —(1) In general. The certificate to be obtained by the claimant is a statement that is signed under penalties of perjury by a person with authority to bind the registered biodiesel producer, is in substantially the same form as the model certificate in paragraph (e)(4) of this section, and contains all the information necessary to complete such model certificate.
(2) Certificate identification number. The certificate identification number is determined by the producer and must be unique to each certificate.
(3) Multiple certificates for single sale. A registered biodiesel producer may, with respect to a particular sale of biodiesel, provide multiple separate certificates, each applicable to a portion of the total volume of biodiesel sold. Thus, for example, a biodiesel producer that sells 5,000 gallons of biodiesel may provide its buyer with five certificates for 1,000 gallons each. The multiple certificates may be provided either to the buyer at or after the time of sale or to a reseller in the circumstances described in paragraph (f)(2) of this section.
(4) Model certificate.
CERTIFICATE FOR BIODIESEL
Certificate Identification Number: __________
(To support a claim related to biodiesel or a biodiesel mixture under the Internal Revenue Code)
The undersigned biodiesel producer (“Producer”) hereby certifies the following under penalties of perjury:
1.
Producer's name, address, and employer identification number
2.
Name, address, and employer identification number of person buying the biodiesel from Producer
3.
Date and location of sale to buyer
4. This certificate applies to ____ gallons of biodiesel.
5. Producer certifies that the biodiesel to which this certificate relates is:
____% Agri-biodiesel (derived solely from virgin oils)
____ % Biodiesel other than agri-biodiesel
6. This certificate applies to the following sale:
____ Invoice or delivery ticket number
____ Total number of gallons of biodiesel sold under that invoice or delivery ticket number (including biodiesel not covered by this certificate)
7. ____ Total number of certificates issued for that invoice or delivery ticket number
8.
Name, address, and employer identification number of reseller to whom certificate is issued (only in the case of certificates reissued to a reseller after the return of the original certificate)
9. ____ Original Certificate Identification Number (only in the case of certificates reissued to a reseller after return of the original certificate)
10. Producer is registered as a biodiesel producer with registration number ____. Producer's registration has not been suspended or revoked by the Internal Revenue Service.
Producer certifies that the biodiesel to which this certificate relates is monoalkyl esters of long chain fatty acids derived from plant or animal matter and that it meets the requirements of the American Society of Testing and Materials D6751 and the registration requirements for fuels and fuel additives established by EPA under section 211 of the Clean Air Act (42 U.S.C. 7545).
Producer understands that the fraudulent use of this certificate may subject Producer and all parties making any fraudulent use of this certificate to a fine or imprisonment, or both, together with the costs of prosecution.
Printed or typed name of person signing this certificate
Title of person signing
Signature and date signed
(f) Statement of Biodiesel Reseller —(1) In general. A person that receives a Certificate for Biodiesel, and subsequently sells the biodiesel without producing a biodiesel mixture, is to give the certificate and a statement that satisfies the requirements of this paragraph (f) to its buyer. The statement must contain all of the information necessary to complete the model statement in paragraph (f)(4) of this section and be attached to the Certificate for Biodiesel. A reseller cannot make multiple copies of a Certificate for Biodiesel to divide the certificate between multiple buyers.
(2) Multiple resales. If a single Certificate for Biodiesel applies to biodiesel that a reseller expects to sell to multiple buyers, the reseller should return the certificate (together with any statements provided by intervening resellers) to the producer who may reissue to the reseller multiple Certificates for Biodiesel in the appropriate volumes. The reissued certificates must include the Certificate Identification Number from the certificate that has been returned.
(3) Withdrawal of the right to provide a certificate. The Internal Revenue Service may withdraw the right of a reseller of biodiesel to provide the certificate and a statement under this section if the Internal Revenue Service cannot verify the accuracy of the reseller's statements. The Internal Revenue Service may notify any person to whom the buyer has provided a statement that the reseller's right to provide the certificate and a statement has been withdrawn.
(4) Model statement of biodiesel reseller.
STATEMENT OF BIODIESEL RESELLER
(To support a claim related to biodiesel or a biodiesel mixture under the Internal Revenue Code)
The undersigned biodiesel reseller (“Reseller”) hereby certifies the following under penalties of perjury:
1.
Reseller's name, address, and employer identification number
2.
Name, address, and employer identification number of Reseller's buyer
3.
Date and location of sale to buyer
4.
Volume of biodiesel sold
5.
Certificate Identification Number on the Certificate for Biodiesel
Reseller has bought the biodiesel described in the accompanying Certificate for Biodiesel and Reseller has no reason to believe that any information in the certificate is false.
Reseller has not been notified by the Internal Revenue Service that its right to provide a certificate and a statement has been withdrawn.
Reseller understands that the fraudulent use of this statement may subject Reseller and all parties making any fraudulent use of this statement to a fine or imprisonment, or both, together with the costs of prosecution.
Printed or typed name of person signing this certificate
Title of person signing
Signature and date signed
(g) Erroneous certificates; reasonable cause. If a claim for credit or payment described in this section is based on erroneous information in a certificate or statement described in paragraph (e)(4) or (f)(4) of this section, the claim is not allowed. Thus, for example, if a producer identifies a product as agri-biodiesel on a Certificate for Biodiesel and the product does not meet the registration requirements established by EPA, a claim for a biodiesel mixture credit based on the certificate is not allowed. However, if the claimant has met the conditions of paragraph (b)(1)(iii)(B) of this section with respect to the certificate or statement, reliance on the certificate or statement will be treated as reasonable cause for purposes of the penalties imposed by sections 6651 (relating to failure to pay) and 6675 (relating to excessive claims).
(h) Effective/applicability date. This section is applicable on and after the date of publication of these regulations as final regulations in the Federal Register .