The IRS has issued welcome transition relief that extends through July 1, 2013 the deadline for filing claims for payments for biodiesel mixtures and alternative fuels sold or used in 2012.
A number of fuel tax credits, including the cellulosic biodiesel producer credit, the biodiesel mixture credit, the alternative fuels credit, and the alternative fuel mixtures credit, expired at the end of 2011. The American Taxpayer Relief Act of 2012 ("ATRA"), which was enacted on January 2, 2013, retroactively extended these income tax credits through 2013. ATRA also retroactively extended through 2013 the refundable excise tax credit for biodiesel mixtures and alternative fuels.
The deadline for filing claims for certain refundable excise tax credit payments had already passed before ATRA was enacted. Such claims generally are due by the end of the first quarter following the earliest quarter of the claimant's income year included in the claim. For example, a calendar-year taxpayer's claim for biodiesel mixtures sold in June and July 2012 ordinarily would have been due by September 30, 2012 (the end of the third quarter, which is the first quarter following the earliest quarter included in the claim). Earlier this year, the IRS released FAQs on its website that explained the procedural requirements for claiming the income tax and excise tax credits in light of ATRA. The FAQs did not extend the filing deadlines for claiming the refundable excise tax credits.
Yesterday the IRS issued Notice 2013-26, which extends the filing deadline for payments for biodiesel mixtures and alternative fuels produced or sold in 2012. Taxpayers now have until July 1, 2013 to file such claims. A claim must be filed on Form 8849 and generally cannot be made with respect to fuel for which another claim has been made. However, the Notice provides that if a taxpayer previously claimed an income tax credit with respect to a biodiesel mixture or alternative fuel, the taxpayer may file an amended income tax return that does not claim the income tax credit and instead file a claim for a refundable excise tax payment on Form 8849. In many cases, filing a claim for payment on Form 8849 may be preferable to claiming an income tax credit.
The fuel excise tax claim and return procedures are complex and require careful analysis.