Rev. Proc. 83-86

SECTION 1. PURPOSE

The purpose of this revenue procedure is to provide uniform instructions to purchasers and other persons required to file Form 6248, Annual Information Return of Windfall Profit Tax, on how to file corrected returns and furnish corrected statements.

SEC. 2. BACKGROUND

.01 Section 51.4997-2(a)(1) of the Excise Tax Regulations requires purchasers to file information returns on Form 6248 and to furnish statements concerning windfall profit tax. Under section 51.4997-2(a)(2), operators, partnerships, and disbursers may also be required to furnish the requisite information.

.02 Section 51.4997-2(c)(5) of the regulations requires persons required to furnish statements or file returns to correct errors by filing corrected returns and furnishing corrected statements.

1 Corrected returns or statements need not be filed or furnished with regard to entries for (a) windfall profit tax liability, (b) windfall profit tax withheld, (c) amount of tax overwithheld, or (d) amount of tax underwithheld unless such entry changes by $ 1.00 or more.

2 Errors ascertained by the June 30 following the year to which the statement or return relates should be corrected by the filing of a corrected return and the furnishing of a corrected statement by the following July 31. This requirement applies only if one of the entries listed in paragraph I changes by $100.00 or more.

3 Any errors ascertained after June 30 or any errors ascertained on or before June 30 that were not reported under paragraph 2 of this section should be corrected by the due dates for filing and furnishing Form 6248 for the year of ascertainment.

4 Errors in name(s), address(es), employer identification number(s), social security number(s), or other identifying data should be corrected by filing a complete amended return or furnishing a complete amended statement when such error is discovered.

.03 Section 51.4997-2(e) of the regulations provides that when the identity of the producer is not known or is in dispute, and the sale proceeds have been placed in escrow or otherwise held in suspense, a Form 6248 should be filed for each such account. At the filer's option, some or all of the returns may be aggregated into a single return. Not later than 60 days after the sale proceeds have been released to the producer, an information return must be filed identifying the producer and statements must be furnished to the producer.

SEC. 3. PROCEDURE

.01 With the exception of returns filed for suspense accounts under section 51.4997-2(e) of the regulations, a corrected Form 6248 should be identified by printing "Corrected Form 6248" at the top of the form.

.02 The following information should be reported on a corrected Form 6248:

1 Complete identifying data for all entry spaces above Part 1. This information must always be furnished even if the original information was correct.

2 Type of Producer and Producer Status: The correct entry should be reported. The appropriate boxes must be checked even if they were correctly reported on the original return.

3 Exempt Oil: Net change entries only. For purposes of this revenue procedure, the term "net change entry", means only the net amount of the changes to barrels of oil and/or dollars previously reported, and not the amount as corrected. For example, if a purchaser reported 200 barrels of tier two oil and a liability of $2800 as an entry on the original Form 6248 and the correct figures are 250 barrels and liability of $3000, the figure should be shown on the corrected Form 6248 as 50 barrels and $200.

4 Information on Taxable Oil Removed: Net change entries under columns for number of barrels and tax liability only.

5 Exempt Royalty Owner Oil: Net change entries only.

6 Windfall Profit Tax Liability: Net change entries only for amount of WPT liability for oil removed during calendar year and amount of WPT withheld with respect to oil removed during calendar year.

7 Amount Withheld: Net change entry only.

.03 Reductions in amounts previously reported should be shown by numbers preceded by a negative sign. For example, if a purchaser reported 100 barrels of tier one oil and $1200 tax liability and the correct figure is 75 barrels and $900 tax liability, the figures that should be shown as entries on the Form 6248 are 25 barrels and $300.

.04 Corrected returns filed to report information for suspense accounts when the identity of the producer becomes known should be made by printing "Corrected-Suspense Account" at the top of the form. Unlike other corrected returns, the correct figures, not the net change entries, should be reported. For example, if a purchaser filed a Form 6248 for a suspense account, and no changes are made other than the identity of the producer being verified, the corrected Form 6248 should show the same information reported on the original Form 6248 other than the corrected identity of the producer. Purchasers should not report information other than that for the suspense account(s) in question.

.05 Operators, partnerships, disbursers, or nominees who receive corrected Forms 6248 under section 51.4997-2(a)(2) of the regulations must file and furnish corrected Forms 6248 to producers within 15 days following receipt.

SEC. 4. EXAMPLES

.01 Purchaser A furnished producer B a Form 6248 for 1982 showing 1,000 barrels of exempt Indian oil and no windfall profit tax liability or amount withheld. In May 7, 1983, A ascertained that the correct amount of exempt Indian oil was 1,200 barrels. Because the net change in tax in any of the entries listed in section 2.021 of this revenue procedure is less than $1.00 since the oil is exempt, no corrected Form 6248 need to be filed with the Service or furnished to the producer. This rule, however, does not preclude the purchaser from furnishing information concerning corrections to the producer. Thus, A may, at its option, furnish a corrected Form 6248 to B at any time. The corrected form should show 200 on the line for Exempt Indian Oil.

.02 Purchaser C furnished producer D a Form 6248 for 1982 showing windfall profit tax liability of $100 and an amount of $50 for windfall profit tax withheld. On May 14, 1983, C ascertained that the $100 figure was correct, but that C actually withheld $75. Because the change is less than $100, C need not file a corrected return or furnish a corrected statement until the due date for Form 6248 for 1983. At that time, C should not make an entry on the line for windfall profit tax liability on the corrected Form 6248 but should show $25 on the line for windfall profit tax withheld.

.03 Purchaser E furnished producer F a Form 6248 for 1982 showing windfall profit tax liability of $1,000 and an amount of windfall profit tax withheld $500. On June 15, 1983, E ascertained that the correct amount withheld was $300. Because the item being changed is $100 or more, E should have filed and furnished a corrected Form 6248 by July 31, 1983. If E had ascertained the error after June 30, 1983, it would have been required to file and furnish a corrected Form 6248 by the due date for the 1983 return. On the corrected Form 6248, E should make no entry for windfall profit tax and should show $200 for windfall profit tax withheld.

.04 Purchaser G furnished producer H a Form 6248 for 1981 showing an amount of windfall profit tax liability for oil removed during the calendar year of $100 and an amount of windfall profit tax withheld on oil removed during the year of $100. G had actually withheld $125. On August 15, 1983, G ascertained that the correct windfall profit tax liability was $150 and that G had actually withheld $125. G should file and furnish a corrected Form 6248 by the due date for the 1983 Form 6248 showing $50 as the amount of windfall profit tax liability and $25 as the amount of windfall profit tax withheld.

.05 Purchaser J furnished producer K a Form 6248 for 1981 showing windfall profit tax liability of $1250 and windfall profit tax withheld of $750. J had actually withheld $1000. On May 2, 1983, J ascertained that the correct liability was $1000 and J had actually withheld the correct amount, $1000. Although the net change is $ 100 or more, J ascertained the error after the June 30 following the year to which the statement relates. Thus, by the due date for the 1983 Form 6248, J should file and furnish a corrected Form 6248 for 1981 showing $250 as the amount of windfall profit tax liability and $250 as the amount of windfall profit tax withheld.

SEC. 5. INSTRUCTIONS TO PRODUCERS

.01 Producers receiving corrected Forms 6248 may owe additional tax or may be entitled to a refund. The Internal Revenue Service is developing instructions on computing additional tax due or claiming an additional refund. Purchasers will be furnished these instructions and are encouraged to mail them to producers when a corrected Form 6248 is furnished to the producer.

.02 Producers entitled to an additional credit or refund greater than that originally claimed should claim the additional amount in the same manner that the credit or refund was claimed originally. Thus, producers who claimed a credit on Form 1040 or 1120 should file Form 1040X or 1120X to claim an additional credit or refund. Producers who claimed a refund on Form 843 should file an additional Form 843.

.03 Producers who owe additional tax should file Form 720 in accordance with the instructions to that form to report any additional tax. Producers who were entitled to the royalty owner's credit under section 6429 of the Internal Revenue Code are cautioned to note that any additional tax due may be eliminated by the allowance of additional credit up to the total amount allowed under that section ($1000 for oil removed in 1980 and $2500 for oil removed in 1981).

SEC. 6. EFFECTIVE DATE

This revenue procedure is effective for all corrected Forms 6248 required to be filed or furnished after June 30, 1983.