Excise Tax Refund Procedure

Special refund procedures for coal producers and exporters on excise tax paid on exported coal Ann. 2008-103, 2008-46 IRB

In a new Announcement, IRS has advised taxpayers how to claim a refund of the excise tax on exported coal under the new procedures provided in Sec. 114 of the Energy and Extension Act of 2008 (2008 Energy Act, P.L. 110-343, 10/3/2008). The claim must be filed with IRS by Nov. 3, 2008.

Background. A manufacturers excise tax is imposed on coal mined from underground or surface mines located in the U.S. and sold or used by the producer. (Code Sec. 4121) In ’98, a district court (Ranger Fuel Corp v. U.S., (DC VA 1998) 83 AFTR 2d 99-375 ) held that the coal excise tax is unconstitutional to the extent it applies to exported coal based on the blanket prohibition imposed by the Export Clause of the U.S. Constitution, and IRS acquiesced, in effect, in that decision by issuing guidance on how to claim a refund for coal excise tax imposed on exported coal. (Notice 2000-28, 2000-1 CB 1116)

The 2008 Energy Act creates a new procedure under which certain coal producers and exporters may claim a refund of excise taxes imposed on coal exported from the U.S.

New refund procedures. Notice 2008-103 provides guidance to domestic coal producers and exporters on the submission of claims for refund of the coal excise tax pursuant to Section 114 of the 2008 Energy Act, which provides the criteria for refunds of the coal excise tax on coal exported on or after Oct. 1, ’90, and on or before Oct. 3, 2008. These claims must be filed by Nov. 3, 2008. All claims for a refund under the 2008 Energy Act must be filed on a paper Form 8849, Claim for Refund of Excise Taxes, Schedule 6, Other Claims, and can’t be filed electronically. “Exported Coal Claim” must be written at the top of Form 8849. The claims must be mailed to: IRS, Cincinnati, OH 45999-0002, and filed no later than Nov. 3, 2008. (Notice 2008-103, Sec. 3)

Notice 2008-103, Sec. 4, describes the information each claim by a coal producer under the 2008 Energy Act must contain. Notice 2008-103, Sec. 5, describes the information each claim by an exporter under the 2008 Energy Act must contain.