Procedures

TTB Procedure 91-1

Section 1. PURPOSE

This ATF Procedure provides instruction and guidance to taxpayers required to pay alcohol and tobacco excise taxes, including special occupational tax and floor stocks tax by electronic fund transfer (EFT). This Procedure supersedes ATF Procedure 87-3 dated 7/87. Substantive changes have occurred. The most important change is that the electronic fund transfer message format has been revised.

Section 2. BACKGROUND

Taxpayers who are liable during any calendar year for $5 million or more in excise taxes imposed on distilled spirits, wines, or beer or on tobacco products and cigarette papers and tubes are required to pay such taxes during the following year by EFT.

An electronic fund transfer is a non-paper, computer to computer, transfer of funds from the taxpayer's financial institution account to the Treasury's Account at the Federal Reserve Bank (FRB) of New York. Such transfers are initiated through an electronic terminal and not by check, money order, or other paper instrument. The taxpayer's financial institution, either directly or through a correspondent bank, must use the EFT system known as Fedwire. This system requires the financial institution to transmit the EFT payment to the FRB of New York.

The law (26 U.S.C. 6651(a)(2)) provides for a penalty for failure to pay the amount shown as tax on a return on or before the date prescribed for payment of such tax. The law (26 U.S.C. 6656(a)) also provides a penalty for failure to make timely deposits of taxes. These penalties shall be imposed unless it is shown that the failure to make a timely deposit or payment of tax is due to reasonable cause and not due to willful neglect. There is no such provision for forgiving interest when a tax payment is not paid timely.

Section 3. TAXPAYERS REQUIRED TO PAY EXCISE TAXES BY ELECTRONIC FUND TRANSFER

A taxpayer who, in a calendar year, was liable for a gross amount of $5 million or more in excise taxes on distilled spirits products, wine products, beer products or on tobacco products and cigarette papers and tubes shall use a financial institution to make payment by EFT of taxes during the succeeding calendar year. Payments of taxes by cash, check, or money order are not authorized for a taxpayer required to make remittances by EFT.

The term "taxpayer" includes a controlled group of corporations as defined in sections 5061(e)(3) and 5703(b)(3) of the Internal Revenue Code of 1986. Therefore, if, in any calendar year, the combined liability of the controlled group was $5 million or more with respect to the taxes on distilled spirits, wines, or beer or on tobacco products and cigarette papers and tubes, then, during the following calendar year, each member of the controlled group of corporations is required to pay such taxes by EFT.

The $5 million threshold and the requirement to make tax payments by EFT apply separately to the tax on distilled spirits products, wine products, and beer products. However, the $5 million threshold applies to a taxpayer's combined tax liability on tobacco products and cigarette papers and tubes. Therefore, if a taxpayer pays tax on both tobacco products and cigarette papers and tubes and if, in any calendar year, the combined tax liability on these products was $5 million or more, the taxpayer must, during the following calendar year, make all tax payments on both tobacco products and cigarette papers and tubes by EFT.

The $5 million threshold applies to the "gross" amount of tax for which a taxpayer was liable during a calendar year, with the amounts being determined separately for distilled spirits products, wine products, and beer products and combined for tobacco products and cigarette papers and tubes. For products other than beer, the "gross" amount of liability is defined as the dollar amount of the tax liability on all taxable withdrawals and all importations during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which taxable withdrawals or importations were made.

In calculating the dollar amount of the tax liability for beer, defined as the gross tax liability on all taxable removals, taxpayers will apply the applicable tax rate (either $7.00 or $18.00) to their net taxable removals. A net taxable removal is defined as the quantity of beer removed for consumption or sale less the quantity of beer returned to the brewery from which removed during the same time period.

When the gross amount of tax liability per calendar year has been calculated, and a determination has been made to pay a particular type of tax by EFT during the following calendar year, then all payments with respect to such taxes must be made by EFT. The requirement to use EFT applies to taxes paid pursuant to Alcohol, Tobacco and Firearms (ATF) returns, whether prepayment or deferred payment, and to taxes paid to the U.S. Customs Service on imported alcohol and tobacco products.

Section 4. TAXPAYER'S WRITTEN NOTIFICATION

The provisions of this section do not apply to importers who do not file ATF tax returns. ATF taxpayers who are not already paying ATF excise taxes by EFT must notify the Chief, National Revenue Center, in writing, when their gross liability for those taxes reaches $5 million in a calendar year.

That notice, which will be considered the taxpayer's agreement to make payments by EFT, must be submitted by January 10 of the year in which the taxpayer must begin paying by that method. It must identify each of the taxpayer's premises required to pay be EFT and must include for each: (1) the name shown on the return; (2) the registry or plant number, if any; (3) the plant address; and (4) the employer identification number. Taxpayers already using EFT do not need to notify the Chief, National Revenue Center of their continued use of EFT in succeeding calendar years.

Section 5. DISCONTINUANCE OF EFT TAX PAYMENTS

A taxpayer who makes EFT tax payments and who, in the preceding calendar year, was liable for a gross amount less than $5 million with respect to such taxes may elect, during the succeeding calendar year, either to continue using EFT or begin using some other approved form of payment, such as check or money order.

A taxpayer who files ATF tax returns and elects to discontinue using EFT shall attach to the first return on which he/she chooses to discontinue paying the tax by EFT a written notification to the Chief, National Revenue Center. The notification shall state that no taxes are due by EFT because, during the preceding calendar year, the gross amount of the taxpayer's liability with respect to such taxes was less than $5 million and that the payment shall accompany the return.

A taxpayer who has more than one location filing ATF tax returns shall attach the required notification to the first return filed by each set of premises which is discontinuing use of EFT.

An importer required to make remittances to the U.S. Customs Service by EFT shall make the remittances in accordance with the requirements of the U.S. Customs Service. Importers who do not file ATF tax returns, who are eligible to discontinue the use of EFT for tax payments on imported alcohol and tobacco products, and who elect to begin using a method of payment other than EFT are not subject to the notification requirements of this section.

Section 6. PREPARING AND FILING ATF TAX RETURNS

Taxpayers paying taxes by EFT will check or show "EFT" in the item of the tax return requesting the form, type, or kind of payment or remittance. This information is very important for the proper crediting of the taxpayer's account. All other items on the tax return will be prepared in accordance with instructions on the form with the exception that EFT taxpayers will ignore any instruction or items indicating that the payment should accompany the tax return.

The use of EFT to pay taxes involves no change in either the due date of the tax return or the place of filing such returns. ADDRESSES OF LOCATIONS FOR FILING RETURNS ARE SHOWN ON THE TAX RETURN FORM. Taxpayers may choose to make their EFT payments on the last day prescribed by law for such payments. However, to facilitate processing, taxpayers are strongly encouraged to file their tax returns prior to making their EFT payments and well in advance of the due date for the returns. This procedure will allow ATF to more quickly match the tax return to the EFT payment and to find any discrepancies.

The longer discrepancies go undetected, the more costly they can be to the taxpayer in terms of additional penalties and interest owed.

Section 7. ELECTRONIC FUND TRANSFER MESSAGES ON FEDWIRE

The instructions in this section and the sample transfer message which follows apply only to EFT payments made on Fedwire in connection with ATF tax returns. THE INSTRUCTIONS IN THIS SECTION AND THE SAMPLE TRANSFER MESSAGE WHICH FOLLOW DO NOT APPLY TO EFT PAYMENTS MADE TO EITHER THE U.S. CUSTOMS SERVICE FOR TAXES ON IMPORTED ALCOHOL AND TOBACCO PRODUCTS OR INTERNAL REVENUE SERVICE TAXES. The U.S. Customs Service and the Internal Revenue Service will provide taxpayers with a separate set of instructions for making EFT tax payments on imported alcohol and tobacco products.

Taxpayers must send a separate Fedwire message for each ATF tax return that is required to be filed. Taxpayers may not use one Fedwire message to pay the tax reported on two or more tax returns. Taxpayers are responsible for making arrangements with their financial institution to send Fedwire messages. If a taxpayer's financial institution is not a member of the Federal Reserve System, the taxpayer's financial institution must use a correspondent bank having access to Fedwire.

Taxpayers must provide specific information to their financial institution so that a transfer of funds can take place. A sample Fedwire format and a description of required information are shown in Section 8. Some of the information remains constant, while the taxpayer and financial institution must provide other information, for each separate transaction. Taxpayers must take into account any deadlines established by their financial institution to transmit the Fedwire payment timely into the Treasury Account. Penalties and interest for late payment may be assessed when a payment has not been credited timely into the Treasury Account.

Taxpayers should follow up with their financial institution to ensure that the payment was made. Such confirmation should include: verification that funds were removed from the taxpayer's account and an acknowledgement by the financial institution that the payment was delivered to the FRB. This information will be useful if it becomes necessary to resolve any discrepancies. It will also serve as the record of payment to be retained as part of the taxpayer's records. Taxpayers and their financial institutions should use extreme care in providing information for EFT messages sent on Fedwire. Failure to supply correct information can result in errors that may subject the taxpayer to penalties and interest for late payment. Taxpayers are strongly urged to carefully review this section and Section 8 below with their financial institution well in advance of the date on which the first EFT message is to be sent on Fedwire.

Section 8. SAMPLE ELECTRONIC FUND TRANSFER (EFT) MESSAGE

An item definition of required information for a funds transfer message to the Treasury and a sample EFT message are given below.

Definition of Required Information for Funds Transfer Messages to Treasury

Tag Name

Tag

Required Information

Type/Subtype Code

(1510)

Type and Subtype Codes entered by the sender. The type and subtype code will be provided by the sending financial institution and is required for all messages sent on Fedwire.
EXAMPLE: 10 00

Amount

(2000)

The dollar amount of transfer. The amount will include the dollar sign and the appropriate punctuation including cent digits.
EXAMPLE: $9,999,999.99

Sender FI

(3100)

Identifies the sending Financial Institution's nine digit routing number and short name. Sending Bank will provide.
EXAMPLE: 999999999 BANK XYZ

Sender Reference

(3320)

The sender institution's reference information may be inserted by the sending bank to identify the transaction.
EXAMPLE: 97040300066030303

Receiver FI

(3400)

Identifies the receiving institution. The nine-digit identifier 021030004 is the routing number of the Treasury. The short name for the Treasury is TREAS NYC. This item is a constant and is required for all funds transfer messages sent to Treasury.
EXAMPLE: 021030004 TREAS NYC

Beneficiary

(4200)

Provided by Agency. The unique eight digit numeric symbol (Agency Location Code) used to identify the Bureau of Alcohol, Tobacco and Firearms. The Agency Location Code (ALC) is critical and must be specified in the funds transfer message in order for the funds to be correctly classified to the respective agency. The Bureaus ALC is 20100002. The agency name may also be provided and entered in the field. EXAMPLE: D
20100003
Bureau of Alcohol, Tobacco and Firearms

Originator to Beneficiary Information

(6000)

Used to identify information conveyed from originator to the beneficiary; e.g., details of payment, serial numbers of tax returns.

*SAMPLE OF FUNDS TRANSFER FORMAT

Type/Subtype Code

(1510)

10 00

Amount

(2000)

$9,999,999.99

Sender FI

(3100)

999999999 BANK XYZ

Sender Reference

(3320)

97040300066030303

Receiver FI

(3400)

021030004 TREAS NYC

Beneficiary

(4200)

D
20100003
Bureau of Alcohol, Tobacco and Firearms

Originator to Beneficiary Information

(6000)

Example: EIN, permit #, tax return or form #, due date and tax period.

Click here for information related to international electronic funds transfer payments.

ORIGINATOR TO BENEFICIARY INFORMATION: Should contain the appropriate information to identify the taxpayer and tax return. The Originator to Beneficiary information field tag is used to signify the beginning of the free-form third party text. An example of data in this category for the Bureau would be as follows:

Tax Payer Name: The taxpayer's name as it appears on the ATF Tax Return.

Tax Return Identification: Identify the tax return for which the Fedwire message is being made. The ATF form number and serial number of the tax return will be given by the taxpayer. The serial number of the tax return will be preceded by the abbreviation S/N, the last two digits of the calendar year and a dash. If the tax return does not contain a serial number then the form number shall be followed by the taxable period. For example:

5000.24 S/N 00-10

    1. S/N 00-10 (For a distilled spirits taxpayer in Puerto Rico qualified for deferred payment.)

5630.5 7/1/00 - 6/30/01
5630.7 7/1/00 - 6/30/01
5000.28T 4/1/00

Employer Identification Number: This number is familiar to taxpayers and is very important to ATF for identifying taxpayers. The letters "EIN" should appear before the number.

Registry/Plant Number or Address of Taxpayer: Taxpayers will give their registry, permit or plant number as assigned by ATF and shown on their tax return. In the case of taxpayers in Puerto Rico, commonwealth location as shown on the tax return will be given in lieu of a registry, permit or plant number.

Depositors should inform their financial institution to use due care and insure that all information is provided in the prescribed format. Failure to provide the information in the prescribed format may cause a delay in the transfer of funds resulting in assessment of penalties for failure to pay and failure to make timely EFT deposits and assessment of interest.

Section 9. OTHER METHODS OF ELECTRONIC PAYMENT

Taxpayers may also choose to pay their taxes electronically by using Remittance Express to process their payments though the Automated Clearing House (ACH) network. The data MUST be provided to your financial institution for proper inclusion in the prescribed transaction format.

The prescribed transaction format or payment type within ACH for ATF is Cash Concentration and Disbursement plus addendum record (CCD+). Remittance Express supports the CCD+ format that includes an addendum record necessary to completely identify your account and provide information concerning your payment to ATF.

If you choose to use Remittance Express to process your tax payments to ATF, you must complete and submit a Letter of Intent for Remitter. A sample of this letter is found in section 13 below.

The following is a brief synopsis of how remittance express works.

  1. Taxpayer will transmit electronic payment instructions and accompanying remittance data to their financial institution SUFFICIENTLY IN ADVANCE TO PASS PAYMENT TO THE ACH 1 BUSINESS DAY PRIOR TO THE DUE DATE.
  2. Taxpayers financial institution insures the timely payment is formatted in the correct CCD+ format and passes the payment file into the ACH network.
  3. Overnight, the ACH network delivers the payment to Treasury's Account at the Richmond Federal Reserve Banks for credit to ATF.
  4. ATF retrieves the remittance data through the CA$H-LINK financial reporting system and updates ATF's accounts receivable files.

Section 10. REMITTANCE EXPRESS

The following is a description of the data utilized by the financial institution in originating the ACH payment to ATF.

Sample of Remittance Express Data for Financial Institutions for use in originating ACH payments to ATF
ACH CCD+ FORMAT

Data Element Name

Contents

Size

Position

Record Type Code*

'6'

1

01-01 (Standard Field)

Transaction Code*

'22'

2

02-03 (Standard Field)

Receiving ABA*

'05103670'

8

04-11 (Standard Field)

Check Digit*

'6'

1

12-12 (Standard Field)

Account Number **

220038

17

13-29 (ATF Specific Data)

Payment Amount

$$$$$$$$cc

10

30-39

Identification No**

Taxpayer EIN

15

40-54 (ATF Specific Data)

Receiver Name**

ATF

22

55-76 (ATF Specific Data)

Discretionary

BLANK

2

77-78

Addenda Indicator**

'1'

1

79-79 (ATF Specific Data)

Trace Number

Assigned by Financial Institution

15

80-94 Financial Institution

* These fields are pre-defined fields.
** These fields are mandatory fields specific to ATF.

Section 11. ADDENDUM RECORD FORMAT

An Addendum Record format MUST accompany the data from the originating ACH payment described above in Section 10.

Sample Addendum Record Format

Data Element Name

Contents

Size

Position

Record Type Code

'07'

1

01-01

Addenda type Code

'05'

2

02-03

Payment Related***

Alpha/numeric Information

80

04-83 (ATF Specific Data)

Sequence Number

Addenda number Starting at 0001

4

84-87

Addenda Trace Number

Same as last 7 numbers of detail Trace Number Assigned by your Financial Institution

7

88-94

*** This field must provide specific information for Payment Related Information to aid ATF in identifying the taxpayer and tax return.

The Mandatory information for the above Payment Related field is as follows:

  1. Taxpayers name as it appears on the ATF Tax Return (e.g. Wine Makers, Inc);
  2. Employer Identification Number (EIN) (e.g. XX-XXXXXXX)
  3. If applicable, the ATF Registry/plant/permit Number assigned to the business (e.g. BW-CA-XXXX);
  4. ATF tax return form number to which the tax payments relates to (e.g. 5630.5);
  5. The tax period BEGINNING mm/dd/yy, and ENDING mm/dd/yy dates (e.g. 01/01/00 - 01/15/00).

NOTE: EACH NUMBERED ITEM MUST BE SEPARATED BY A SPACE OR A COMMA.

Section 12. SAMPLE FORMATS FOR THE PAYMENT RELATED FILES IN THE ADDENDA RECORD

SAMPLE 1: EXCISE TAX (ALCOHOL AND TOBACCO)

Mondays Wine Lodge,54-1010101,BW-CA-XXXX,5000.24,01/01/00,01/15/00

SAMPLE 2: EXCISE TAX (FIREARMS AND AMMUNITION)

A). (Full Payment)

Wednesdays Gun Shop,54-0101010,5300.26,01/01/00-03/31/00
B) (Deposit Coupon)

Sundays Shooting Gallery,54-7676767,5300.27,01/01/99-03/31/99

SAMPLE 3: SPECIAL OCCUPATIONAL TAX (SOT)

A) (Full Year)

Thursday Deli, 54-4545454.5630.5,070198-6/30/99

  1. (Partial Year)

Any Day Deli,54-5454545,5630.5,01/0199-06/30/00

  1. (SOT-National Firearms Act, Full Year Only)

Saturdays Gun Shop, 54-5454545,5630.7,07/01/99-06/30/00

FORMAT MUST INCLUDE COMMA OR SPACE

COMPANY NAME,EIN,PERMIT NUMBER,ATF TAX FORM NUMBER,TAX PERIOD

Reminder: To ensure proper classification and posting of your payment remember to supply the correct ATF form number. Listed above are just a few examples. There are many more ATF form numbers than listed here.

Section 13. REMITTANCE EXPRESS - LETTER OF INTENT FOR REMITTER

This letter is used to designate the method of payment that your organization plans to use to remit tax payments to the Bureau of Alcohol, Tobacco and Firearms. A sample of the letter of intent for remitter is given below.

SAMPLE: REMITTANCE EXPRESS - LETTER OF INTENT FOR REMITTER

  1. Remitting Organization Information

________________________________________________________________________________
(Name of Organization)

____________________________________________________________________________________
(Address)

____________________________________________________________________________________
(City, State and Zip Code)

  1. Organization Contact Person:____________________________________________

Phone Number:____________________________________________
Email Address:____________________________________________

  1. Organization Authorizing Official:

_________________________________________________________________

(Name and Title)

______________________________________________________________________________

(Signature of Authorizing Official)

4. Permit/Registry Number:_________________________________________________

Section 14. INQUIRIES

Inquiries about the requirement to pay excise taxes by EFT and about preparing Fedwire messages for payments made in connection with ATF tax returns should be directed to the Chief, National Revenue Center.

Inquiries about the requirement to pay excise taxes by EFT to the U.S. Customs Service on imported alcohol and tobacco products, including preparation of entry or withdrawal documents, collection processing procedures and preparation of EFT messages, should be directed to the Accounting Services Division, U. S. Customs Service, ATTN: Robert Hamilton, Chief, Revenue Branch (317) 298-1200 extension 1107.

This was last updated on August 16, 2000

 

Page last reviewed/updated: 09/04/2012

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