Motor Fuels Tax Minute, Episode 2

This week on the Motor Fuels Tax Minute, our team continues discussing the Superfund tax and reviews the requirements for semi-monthly deposits. The first semi-monthly deposit is due to the IRS Friday, July 29, 2022.


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Detailed Transcription of Weaver’s Motor Fuels Tax Minute, Episode 2


Leanne: Welcome to Weaver's Motor Fuel Minute. This week we're discussing federal excise tax and semi-monthly deposits for the Superfund tax. Taxpayers who currently file a Form 720 may already be familiar with this but for taxpayers who have never paid excise tax prior to the Superfund tax, this is new and there is a lot of information.

The first of these semi-monthly deposits is due on Friday, July 29th and 95% of the estimated Superfund tax liability must be deposited with the IRS. The good news is that the IRS has waived their late payment penalties for the first few periods. While it may seem confusing and while there may be some late payments made, there is time to get into compliance.

Emilda, knowing that this can be confusing... What do taxpayers need to know regarding the timing of the payments, the method of the payment and whether there are any forms to be included?


Emilda: Yes, great point. Thanks for that introduction and the details behind the penalty. Right now, Leanne, there are some semi-monthly deposits that are due twice a month for each month in the quarter. The due dates are the 14th and the 29th of each month. There are no weekend provisions, so it's important to understand that if the 14th and the 29th fall on a weekend or a legal holiday, the deposit must be made immediately preceding day prior to that holiday or weekend. Again, there are no weekend provisions, we don't want those payments to go out late because the penalties are pretty hefty.

The other thing to understand is that for some of those companies who have never filed a semi-monthly deposit, they will need to coordinate with their banks if they are submitting an ACH credit because there are financial institution cut off times in a given day where they will not allow an ACH credit to go out after a certain time.

The other thing is there are no forms that need to be incorporated into a deposit. Deposits are basically looking at your monthly transactional detail and submitting the tax liability for that deposit payment. There are no forms that need to be submitted at this time. We are just filing the semi-monthly deposits.

Now there are a couple of methods for the deposit calculations. Some of them are based on the regular method, the other one is based on the alternative method, and really it just depends on the business and the type of method they'll be using. But, whatever method is used, it needs to be consistent for that quarter.

Also, there are special rules with electronic deposit requirements. Make sure that you're registered through EFTPS, which is the Electronic Funds Transfer Payment System. If you're not registered to remit any electronic payments today, it's important that you go online and register because those payments are due to the IRS on time and through an electronic process payment system. No checks should be mailed, they do have to be made electronically.

If you for some reason have a situation where you don't meet the credit timeline and you've missed it, you have a same day wire payment that you can submit your payments through. There are costs associated with that process, those who may be looking at the wire payment, please work with your financial institution to identify what those costs are. But, you can still make your payment on the same day of the payment due date.

And really, I just want to emphasize again, if you're not registered with EFTPS, you should register online. There is a PIN that will be issued to the taxpayer so that they can submit those payments electronically through the EFTPS website. As soon as you go online, submit it and a PIN should be issued to you shortly within seven days. It may even be sooner at this point, but I would encourage any taxpayer who's not been registered to do that.

As far as forms, there is a 720 form and a 6627 form, but these forms are not due until the quarter filing, which is your 720 federal excise tax filing at the end of the quarter. For Q3 2022, you have your July, your August and your September tax period that has to be filed at the end of the quarter, which would be October 31st. That really is the only time you will be filing those forms. And again, the 6627 form an existing form, but it has new rates for the Superfund tax that went into effect July 2022 - that form should be accompanied with the 720 return.


Leanne: Thanks, Emilda. Lots of great and important information there for taxpayers. One final note, when you do make those payments for chemicals, it's IRS number 54. And for substances, it's IRS number 17. Those numbers can be found on that form 667 if you have any questions.

That was Weaver's Motor Fuels Minute. Thank you.

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Leanne Sobel

Leanne Sobel

Director, Motor Fuels and Excise Tax Services


Leanne Sobel, J.D., has over 15 years of experience in legal tax matters. Her career focus includes federal and state tax and…

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