4.24.15. Excise Fuel Compliance Inspection, Sampling and Shipping

(1) The Fuel Compliance Program started in June 1994, following passage of the Omnibus Budget Reconciliation Act of 1993 that became effective on January 1, 1994. Initially, the focus of the program was on the proper sale and use of diesel fuel indelibly dyed in accordance with IRS regulations. In subsequent years, the Fuel Compliance Program adapted as the fuel industry changed. Fuel inspections now involve a broader range of taxable fuels, as well as alternative fuels. For compliance purposes, it is essential FCAs, FCOs, managers and senior management officials understand and follow the technical guidance explained in this section.

(1) The federal excise tax imposed by IRC 4081, Imposition of tax, no longer applied to removals of diesel fuel that are indelibly dyed (or dyed and marked) in accordance with IRS regulations.

(2) IRC 4083(d), Taxable fuel; definitions; special rules; administrative authority, and Treas. Reg. 48.4083-1(a), Taxable fuel; administrative authority, authorize officials (employees) of the IRS, upon presenting appropriate credentials and a written notice to the owner, operator, or agent in charge, to enter any place and to conduct inspections in accordance with paragraphs (a) through (c) of Treas. Reg. 48.4083-1. IRS officials are authorized to inspect, examine and search:

• Equipment used or capable of being used for the production, storage, or transportation of fuel, fuel dyes or fuel markers.

• Equipment used to determine the amount or composition of taxable fuel.

• Equipment used for the dyeing or marking of fuel.

• Containers used or capable of being used for the production, storage or transportation of fuel, fuel dyes or fuel markers.

• Books and records kept to determine excise tax liability under IRC 4081.

• Propulsion tanks of vehicles and trains.

• Fuel cargo storage tanks of vehicles, trains and marine vessels.

(3) Service employees are authorized to take and remove samples to determine the composition of the fuel. Refer to Treas. Reg. 48.4083-1(c)(3).

(4) This authority applies to three broad categories:

1. Designated inspection site inspections, see IRM 4.24.15.2.1.3.

2. Pervasively regulated industry inspections, where fuel is stored or may be stored, see IRM 4.24.15.2.1.1.

3. Other inspections where consent is granted by the taxpayer, see IRM 4.24.15.2.1.2. If permission is not granted, the Service employee will need to obtain a writ of entry, after discussing the issue with the group manager. See IRM 4.24.15.2.1.5.

(1) Director, Examination - Specialty Policy is responsible for the procedures and policies in this section.

(2) Program Manager, Excise Tax Policy is responsible for ensuring that the procedures are accurate and updated regularly, as needed.

(3) Chief, Estate & Gift/Excise Tax Examination is responsible for ensuring excise tax employees adhere to the procedures within this section.

(4) Territory manager(s) are responsible for ensuring the group managers are aware and adhere to the procedures in this section.

(5) Excise group managers are responsible for ensuring their employees have current copies of this section and are adhering to the procedures in this section pertinent to their role.

(6) FCOs and FCAs are responsible for following all pertinent guidance in this section. The term "Service employee" is used throughout this section and refers to both FCO and FCA positions.

(1) Program Reports - The effectiveness of employees following the procedures outlined in this section is evaluated with the use of the following reports:

• Sample error

• Issue Management System (IMS)

• Year-to-Date (YTD) monitoring

(2) Program Effectiveness - The effectiveness of this program is not measured by revenues assessed or collected, but by revenues protected. IRS employees being vigilant and visible in all geographic regions, promotes voluntary taxpayer compliance.

(3) Annual Reviews -

• Program Manager, Excise Tax Policy or designee conducts program reviews

• Chief, Estate & Gift/Excise Examination conducts territory operational reviews

• Territory managers conduct group operational reviews

(4) Annual Review- The Excise Tax Policy Program Manager is responsible for reviewing the information in this section to ensure accuracy and promote consistent tax administration.

(1) All information management systems that are utilized have safeguard measures in place, which address all key components of Information Technology (IT) security to restrict access to sensitive data.

(1) The following table contains the definitions of the terms utilized throughout this IRM section.

(2) The following table contains the acronyms utilized throughout this IRM section.

(1) The inspections sites can be broadly categorized as pervasively regulated, non-pervasively regulated or designated inspection sites.

(2) The actions taken by a Service employee will be determined by the type of inspection site.

(1) IRC 7602(a)(2), Examination of Books and Witnesses, permits a Service employee to contact third parties to:

1. Ascertain the correctness of any return

2. Make a return where none has been made

3. Determine the tax liability of any person

(2) For purposes of IRC 7602, determining the tax or penalty associated with an action permitted by IRC 4083(d) qualifies as determining the tax liability of any person.

(3) The Taxpayer First Act amended IRC 7602(c)(1) and is effective for notices of third party contacts and contacts of third parties made after August 15, 2019. The Code now requires that the Service:

• Issue advance written notice of third party contacts.

• Intend, at the time such notice is issued, to contact third parties (and state this intent in the notice).

• Specify in the notice the time period, not to exceed one year, within which the Service intends to make the third party contacts.

• Send the notice at least 45 days before making contact with a third party, except as otherwise provided by an authorized Service delegate of the Secretary.

  Note: Effective August 15, 2019, Publication 1 no longer satisfies the advance notice requirement of IRC 7602(c)(1), Examination of books and witnesses; notice of contact of third parties.

(4) In all situations involving third party contact notices provided after August 15, 2019, or in which contacts with third parties will occur after August 15, 2019, a notice meeting the new requirements must be provided. Employees may not contact a third party until the 46th day following the date of the notice, except as otherwise provided by an authorized Service delegate of the Secretary. Employees will use Letter 3164-E, Third Party Contact, revised in April 2020.

(5) The taxpayer can waive rights under IRC 7602(c) and authorize the Service to contact a third party by signing Form 12180, Third Party Contact Authorization Form. If a taxpayer signs Form 12180, then Form 12175, Third Party Contact Report Form, does not need to be completed and the Service employee may proceed contacting third parties listed on Form 12180. Refer to IRM 25.27.1.3.6, Taxpayer Authorizes Contact with Third Party, for additional information.

(6) For additional guidance about procedures and documenting third party contacts, refer to IRM 25.27.1, Third Party Contacts, Third Party Contact Program.

(7) The table below provides guidance on whether an action is a third party contact requiring advance notice to the taxpayer:

(1) The procedures to be followed and the samples to be obtained at each terminal facility will differ depending on:

1. The terminal's safety procedures

2. The products stored and sold

3. The fuel dyeing method

(2) The Service employee must present credentials and provide the terminal operator or other responsible party with a Notice 916 (EN/SP) and Publication 1 prior to conducting the inspection and explain what fuel samples are needed.

(3) The Service employee should tour the facility. The tour should include, but not be limited to, following the line from the dye tank to the dye injection point(s). The Service employee should look for security measures in place to deter and detect tampering with the mechanical dye injection system and indications security measures were breached. Specific security measures are not required; therefore, the lack of particular security efforts will not result in the imposition of IRC 6715(a)(2), Dyed fuel sold for use or used in taxable use, etc.; imposition of penalty.

(4) The Service employee should obtain information regarding the operation of the terminal including, but not limited to, the terminal's:

1. Emergency plan

2. Hours of operation

3. Layout including location of tanks and racks

4. Modes of fuel delivery and disbursement

5. Types of fuel stored and/or sold at this location

6. Dyeing method

7. Location and number of dye injectors

8. Position at the loading rack (loading arm) with which each dye injector is directly coupled

9. Fuel supplier

10. Types of records maintained at the terminal

11. Sales of B70-B99 and E-00

12. Security and anti-tamper measures in place to deter and detect tampering with the mechanical dye injection system

(5) Service employees must inspect the shipping documents to:

1. Ensure BOLs contain the required notice. See Treas. Reg. Section 48.4101-1(h)(3)(ii)(A).

2. Ensure the 12 month record retention requirements are met.

3. Identify unusual sales of dyed fuel, which may indicate improper use of dyed fuel downstream.

(6) Service employees will ask the terminal about sales of B70-B99 and E-00. If the terminal sells these products, the Service employee will obtain a customer list and submit a Form 5346, Examination Information Report.

(7) To ensure the dye concentration requirement under Treas. Reg. Section 48.4082-1(b) is met, Service employees will obtain a "concentration" sample of dyed fuel from a transport compartment.

(8) If the terminal has more than one dye injector at the loading rack, the Service employee should attempt to secure "concentration" samples from each loading arm that has a separate dye injector.

(9) Transport compartment samples will be secured using the following procedures:

1. Present credentials and issue a Notice 916 (EN/SP) to the transport driver.

2. Explain the purpose and the method of securing a sample.

3. If necessary, ask the driver to relocate the vehicle out of the normal traffic flow before obtaining the sample.

4. Record the name of the trucking company and license number.

5. Ask the driver which compartments contain dyed fuel.

6. Ask the driver about prior cargo.

7. Wait at least 15 minutes for fuel to settle and dye to mix.

8. Use the sampling pump method described in IRM 4.24.15.13 to obtain the sample.

9. Secure a copy of the BOL for the load from which each sample was taken.

10. If more than one dye injector exists, indicate in the case file which dye injectors were used to dye the fuel for each sample secured.

11. If any of the samples appear to be below concentration, secure additional samples from subsequent transports that used the same dye injector.

(10) Some terminal owners require terminal employees to draw the samples. In that instance, the Service employee must observe the sampling process to ensure a sample is properly obtained.

(11) If after two hours a "concentration" sample can not be obtained and the other inspection duties are complete, the Service employee may leave without a sample but will notate in the workpaper why a sample was not obtained.

(12) Samples of undefined product and waste oil should be obtained if the products are stored at the terminal. The Service employee must:

• Follow the procedures in paragraph (8) if the sample will be obtained from a transport compartment.

• Observe the sampling process if the sample will be obtained from a terminal storage tank by an employee of the terminal.

• Request a list of customers who purchased the undefined product or waste oil.

• Use the sampling matrix in IRM 4.24.15.15.2 to determine the number of one-ounce samples needed. Use the guidance under the Suspicious Fuel category.

Note: The sampling matrix also provides instructions for completing Form 9667, required paperwork and information for the laboratory reports generated.

(13) At a minimum, the case history must document the following:

1. The reason for conducting the inspection (i.e., FIDGAP selection, observed an event).

2. Name and position of the terminal employee who authorized the inspection.

3. Name of the transport driver to whom the Service employee was introduced by the terminal manager or designee.

4. Delivery of Publication 1 and Notice 916 (EN/SP).

5. Any change in ownership of the terminal.

6. Fuel products sold and/or stored at the facility.

7. Comments on the number of dye injectors and which loading arms are associated with each dye injector.

8. Comments regarding fuel storage.

9. Method of fuel receipt and delivery (pipeline, barge or transport).

10. Comments on the distribution of transmix, undefined product and waste oil.

11. Comments on the review of records and sales of dyed products.

12. Review of BOLs for notice requirement.

13. Statement that required records are maintained on site for one year.

14. Comments about the tour and the mechanical dye injection system and security measures the facility uses to secure the injection system.

15. Comments on necessary corrective actions discussed with the taxpayer.

16. Results of the screening of company vehicles and fueling practices, if applicable.

17. Samples taken and sampling procedures. If a concentration sample was not obtained at the terminal, explain why.

18. Statement as to whether samples met the dye concentration minimum requirement

    Note: See IRM 4.24.15.3.2 for procedures for addressing a below concentration fuel sample obtained from a terminal.

19. Statement as to whether the samples of undefined product and waste oil were determined to be "suitable for use as a motor fuel." If the test results from EFL show the product is suitable for use, the Service employee will generate a Form 5346. The referral will include the EFL test results and the information on the customers who purchased the product. SeeIRM 4.24.13.9.1 for instructions on completing a referral.

20. Date the sample results were received and the closing letter was issued.

(14) If the test results from EFL show the fuel was below concentration, the Service employee will plan a follow-up inspection to occur within one month of the initial inspection. See IRM 4.24.15.3.2.

(15) The Service employee must timely record the inspection in IMS. See IRM 4.24.16.2 , Report Writing and Case Processing Overview, for guidance.

1. Use a substitute Taxpayer Identification Number (TIN) to identify the specific facility. The substitute TIN format is 00-0 plus the 6 digits from the specific facility's Terminal Control Number (TCN). Example: The TCN for ABC Terminal is T-61-KY-1234, therefore, the substitute TIN is 000611234.

2. Use Activity Code (AC) - 515.

3. Use Standard Audit Index Number (SAIN) - EX515.

(16) Follow the procedures in IRM 4.24.16, Excise Fuel Compliance Report Writing, Case Processing and Appeals Procedures, to close the inspection.

(17) The Service employee should inform the Facility Control Number (FCN) Coordinator if the terminal or refinery (some terminals may also be refineries) has closed, no longer sells taxable products, has an address change, or has changed ownership. See IRM 4.24.17, Excise Summary Terminal Activity Reporting System (ExSTARS) Compliance Examination Procedures, for FCN Coordinator notification procedures.

(18) Refer to the applicable subsections below if the terminal also engages in business activities that would classify it as a fuel wholesaler, retailer and/or end-user.

(1) When test results from the EFL indicate the dye concentration did not meet the requirements (possible infraction), the total number of gallons involved will include only those gallons indicated on the BOL unless another sample was obtained from the same injector on the same or subsequent date (i.e., follow-up inspection additional transports). If additional samples were obtained and found to be below concentration, the total gallons involved would be all gallons dispensed from the identified dye injector/loading arm from the time the first below concentration sample was secured through the period of time that the subsequent below concentration sample was secured.

(2) The Service employee will follow the procedures below within five business days:

1. Inform the taxpayer of the sample results and provide a copy of Letter 3144, Fuel Compliance Program Inspection Results, to the terminal operator informing them that the fuel is taxable and instruct the terminal operator to include the fuel on the Form 720, Quarterly Federal Excise Return, and Form 720-TO, Terminal Operator Report. The inspection will remain open on IMS until the fuel is dyed to the required concentration.

2. Obtain from the terminal the position holder's name, employee identification number (EIN) and Form 637 registration number.

3. Conduct a follow-up inspection at the terminal within one month from the date of the initial inspection.

4. Collect a second sample of dyed fuel from the same source where the original below concentration sample was taken, e.g., loading rack arm, etc.

5. Mark the samples so EFL can identify them for priority handling. The sample labels should be marked as usual for terminal "concentration" samples but, in addition, enter the words "SECOND" or "THIRD" (as appropriate) in the blank to the right of "Other" on the sample bottle label.

   Note: Use words and not numerals to reduce confusion over fuel types, etc.

6. After entering the TCN on the label, enter the original sample number from the below concentration sample to the right of the TCN.

7. The FCO will generate a referral and include a copy of the BOLs or the BOL numbers with the referral. The BOL information is required for the revenue agent to verify the below concentration load was included on the Form 720-TO and to determine if the gallons were included on a Form 720.

8. The FCA will contact the group manager to discuss pursuing the tax matter.

(3) If the lab result from the follow-up sample indicates the concentration of dye in the fuel is still not in compliance, the Service employee will repeat the procedures outlined above. The second referral should reference the previous referral to ensure the revenue agent is aware of the extent of the issue.

(1) Railroad terminals have an exception to Excise Summary Terminal Activity Reporting System (ExSTARS) reporting requirements which permits them to make daily summary disbursement reports instead of reporting the individual disbursements. The Service employee must be aware of this exception when conducting an inspection or, for the FCA, an examination of the Form 720-TO. The meter tickets must contain the dyed fuel notice as required by Treas. Reg. Section 48.4101-1(h)(3).

(2) The purpose of an inspection of a railroad terminal is the same as for other types of terminals. The Service employee should follow the procedures outlined in IRM 4.24.15.3.1, Terminal Inspection Procedures.

(3) To address safety concerns and the unique nature of railroad terminals, specific procedures have been developed for railroad terminal inspections. The procedures apply only to fuel inspections, not to the examinations conducted by the FCA or excise revenue agents. Unless specifically contradicted in the procedures below, the procedures for inspections of railroad terminals are the same as for other terminals.

(4) To address the safety concerns while maintaining the IRS authority to conduct unannounced inspections, the following arrangement has been agreed to:

1. The IRS will provide the railroad terminals a list of the employees authorized to conduct inspections. The list will include name, title and a unique identifying number.

2. Each railroad company will provide contact names and telephone numbers for each terminal. If the Service employee does not have the contact information, the Service employee should ask the group manager for assistance in securing the needed contact information.

3. Upon arrival at the terminal but prior to entering the property, the Service employee will call one of the contact persons identified by the railroad company. The terminal employee will provide instructions to the Service employee or an escort.

4. The Service employee will provide the terminal with their full name and unique number. The terminal will validate the name and number with the information provided by the IRS.

Note: The railroad terminal is not permitted to make a copy of the Service employee’s credentials.

5. After the information is validated, the inspection will proceed.

(5) Typically, railroad terminals do not retain the records required in Treas. Reg. Section 48.4101-1(h)(3)(ii) at the terminal site. Also, the disbursement records do not detail the disbursements into each locomotive.

(6) To address the ability of the railroad terminal companies to comply with the record requirements, railroad terminals must provide the following:

1. The summary reports covering the last twelve months. Summary reports detail each removal of fuel. The summary reports are prepared on a thirty-day cycle. Therefore, records of the most recent disbursements (disbursed since the last summary report was filed) will not be available. For example, if an inspection was conducted in January, the summary report for December would not be available. The railroad terminal would be required to provide the summary reports through November.

2. Meter tickets must contain the language required in the dyed fuel notice to specify the product is dyed in compliance with Treas. Reg. Section 48.4082-2. In addition the tickets should contain the name of the common carrier who removed the fuel, and the name of the entity that delivered the fuel into the supply tank of the train. If meter tickets for the last twelve months are not maintained at the terminal, the railroad company will provide the records by facsimile upon request by the Service employee.

(1) The Service employee must present credentials and provide the wholesaler with Notice 916 (EN/SP)and Publication 1 prior to conducting the inspection.

(2) The Service employee should tour the facility and obtain information from the wholesaler that will help understand the operation of the business, including but not limited to, the following information:

1. Emergency plan, if any

2. Hours of operation

3. Location of tanks and racks

4. Types of fuel stored and/or sold at the location

5. Identity of the fuel supplier(s)

6. Types of records kept of sales and deliveries

7. Sales of dyed product to end-users

8. Presence of retail pumps

9. Source of the fuel in the propulsion tanks of the wholesaler's trucks

10. Verification of correct Form 637 registrations related to the known and observed business operations

(3) The Service employee will screen the fuel by obtaining a nozzle sample from each tank containing diesel or kerosene, whether or not it is dyed, using the sampling methods described in IRM 4.24.15.13. The Service employee will screen the fuel to:

1. Determine whether the strength or composition of the dye has been altered. The Service employee will secure a field concentration sample if the records or appearance of the fuel indicates that the dye concentration of the fuel may have been altered or is otherwise suspicious.

2. Determine whether fuel identified as highway fuel or intended for use as highway fuel contains dye.

3. Determine if clear distillates meet the sulfur requirements. Samples should be obtained for sulfur testing only if information indicates the fuel may exceed the allowable sulfur level. See IRM 4.24.15.10 for more information and for situations when Service employees are required to secure a sulfur sample.

(4) Gasoline samples are only secured as part of a project or at the instruction of management. If EFL sample results show adulterants, the FCO will generate a Form 5346 and the FCA will discuss how to proceed with the group manager.

(5) The Service employee shall take photographs to support any penalty determinations.

(6) See IRM 4.24.15.15 for labeling instructions if a "field concentration" or "sulfur" sample is obtained.

(7) Refer to the applicable IRM section if the wholesaler also engages in business activity that would classify it as a retailer and/or an end-user.

(8) Refer to IRM 4.24.15.10.1 for procedures on documenting samples taken for sulfur concentration testing.

(9) Refer to Notice 2005-80 or the governing Treasury regulation when published, for the requirements of a blender of biodiesel at a site other than a terminal.

(10) The wholesaler may be subject to penalties if any of the following is found:

(11) If a potential compliance issue exists, the Service employee is expected to "follow the fuel" back to its source or to its destination. Any inspection conducted as a result of following fuel is considered a separate inspection.

(12) When proposing a penalty., at a minimum, the case history documentation must include:

1. Taxpayer identification number (EIN/SSN).

2. Taxpayer name.

3. Site address and office address of the taxpayer. Both addresses must be input into IMS.

4. The reason the site was selected for inspection.

5. The name and position within the company of individual that authorized the inspection.

6. A statement indicating delivery of Publication 1 and Notice 916 (EN/SP).

7. Comments relating to fuel storage.

8. The identity of fuel supplier(s).

9. Comments on review of records and sales of dyed products to end-users.

10. Comments on presence of retail pumps and required notice.

11. In situations where the required notice was not present, comments on required actions taken to ensure the notice decal was properly affixed prior to the completion of the inspection and appropriate educational/outreach procedures were followed by providing Notice 1420, Sales of Dyed Diesel and Kerosene. In these situations, a penalty is still appropriate.

12. Photographs, if taken to support a penalty determination.

13. The results of the screening of company vehicles and fueling practices.

14. Comments on the number of samples taken and sampling procedures utilized.

15. Comments on Form 637 registration verification.

16. Comments on necessary corrective actions discussed with taxpayer.

17. The sample results and date the lab results were received.

18. The date the closing letter was issued.

(13) For inspections that result in no adverse action, the case documentation must include (at a minimum):

1. Taxpayer identification number (EIN/SSN).

2. Taxpayer name.

3. Site address and office address of the taxpayer. Both addresses must be input into IMS.

4. The reason the site was selected for inspection.

5. Name and position within the company of the individual that authorized the inspection.

6. Comments as to what actions were taken (i.e., sampling, screening, required notice) to determine that the taxpayer was in compliance, and the results of those actions.

7. Lab results (if applicable).

8. The date the closing letter was issued.

9. Any additional information, as warranted.

(14) Follow the procedures found in IRM 4.24.15.8 related to a blitz inspection.

(1) The Service employee must present his/her credentials as well as provide the retailer with a Notice 916 (EN/SP) and Publication 1 prior to conducting the inspection.

(2) The Service employee will tour the facility and obtain information from the retailer that will help understand the operation of the business, including but not limited to the following:

1. Hours of operation

2. Location of all pumps and tanks

3. Types of fuel stored and/or sold at this location

4. Identity of the fuel suppliers

5. Types of records kept for sales and deliveries

6. Sales of dyed products to end-users

7. Source of the fuel in the propulsion tanks of the retailer’s trucks

8. Form 637registration information

(3) The Service employee will obtain a nozzle sample from each tank holding diesel or kerosene, whether dyed or undyed, using the procedures found in IRM 4.24.15.13, Sampling Methods.

(4) Dyed fuel samples will only be forwarded to the lab if a penalty is being proposed or the appearance of the fuel indicates that the dye concentration of the fuel may have been altered or is otherwise suspicious.

(5) Samples should be obtained for sulfur testing only if information indicates the fuel may exceed the allowable sulfur level. See IRM 4.24.15.10 for more information and the table therein for situations when Service employees are required to secure a sulfur sample.

(6) The Service employee shall take photographs to support any penalty determinations.

(7) Gasoline samples are only secured as part of a project or at the instruction of management. If EFL sample results show adulterants, the FCO will generate a referral, and the FCA will discuss how to proceed with the group manager.

(8) Refer to the applicable IRM section below if the retailer also engages in business activity that would classify it as an end-user.

(9) The retailer may be subject to penalties if any of the following is found:

(10) When proposing a penalty, at a minimum, the case history documentation must include the following:

1. Taxpayer identification number (EIN/SSN).

2. Taxpayer name.

3. Site address and office address of the taxpayer. Both addresses must be input into IMS.

4. Name and position within the company of individual that authorized the inspection.

5. The reason the site was selected for inspection (e.g. FIDGAP, observed storage tank from road).

6. Delivery of Publication 1 and Notice 916 (EN/SP).

7. Comments on fuel storage.

8. Identity of fuel suppliers.

9. Comments on types and number of retail pumps.

10. Results of the screening of company vehicles.

11. Samples taken and the sampling procedures used to obtain the samples.

12. Comments regarding the posting of the required notice on dyed fuel retail pumps.

13. In situations where the required notice was not present, include comments on the actions taken to ensure compliance. The actions will include ensuring the notice decal was properly affixed prior to the completion of the inspection and providing educational materials including the Notice 1420, Sales of Dyed Diesel and Kerosene. In these situations, a penalty is still appropriate.

14. Photographs of the retail pump (before and after notice decal was affixed).

15. Comments on Form 637 registration verification.

16. Comments on necessary corrective actions discussed with taxpayer.

17. Comments on sample results and date received.

18. Comments on the date the closing letter was issued.

(11) For inspections that result in no adverse action, the case history documentation must include (at a minimum):

1. Taxpayer identification number (EIN/SSN).

2. Taxpayer name.

3. Site address and office address of the taxpayer. Both addresses must be input into IMS.

4. The reason the site was selected for inspection.

5. Name and position with the company of the individual that authorized the inspection.

6. Comments as to what actions were taken (i.e., sampling, screening, required notice) to determine that the taxpayer was in compliance, and the results of those actions.

7. Lab results (if applicable).

8. The date the closing letter was issued.

9. Any additional information, as warranted.

(12) Complete the Blocked Pump Check sheet found in Exhibit 4.24.15-1, if the retailer is a Form 637 UP registrant. The Service employee is responsible for sending the completed Blocked Pump Check sheet via secure e-mail to the group manager and to the 637 Registration Group Manager. See IRM 1.10.3.2.1, Secure Messaging & Encryption, for information on sending secured e-mail messages.

(13) For procedures related to a blitz project, see IRM 4.24.15.8.

(14) For procedures relating to sulfur, see IRM 4.24.15.10.

(1) The Service employee must secure permission from the person or agency that controls the site to establish an IRS fuel inspection site.

(2) The Service employee must defer to the person in control on traffic flow and safety issues.

(3) The Service employee must identify the site as an IRS fuel inspection site with the official sign provided.

(4) The Service employee must convey his/her identity and contact information, and provide a Notice 916 (EN/SP) to every driver prior to conducting the inspection.

(5) If the driver refuses the inspection, see IRM 4.24.15.2.1.2 for procedures.

(6) If the vehicle is a fuel transport, review the BOL to determine:

1. If the BOL indicates dyed middle distillate fuel obtain a fuel sample to confirm.

2. If the sample does not match the BOL (e.g. BOL indicates dyed product, but the fuel is clear), secure a copy or photograph of the BOL and document the BOL number and source of fuel. The FCO will make a referral for the appropriate examination fuel group. The FCA should consult with the group manager on how to proceed.

(7) Screen the fuel in the propulsion tank using the screening procedures found in IRM 4.24.15.12.

(8) If no dyed fuel is present and the fuel appears normal, the Service employee will secure only the tag and state information and release the driver.

(9) If dyed fuel is present or the contents of the fuel are suspicious (i.e., the fuel is dark), the Service employee will inform the driver, issue a Publication 1 and secure a usage sample. In these situations, the Service employee will obtain the following information:

1. Name of driver

2. Name of company or owner

3. Address of driver and company

4. Phone number of driver and company

5. Position of the driver with the company

6. Driver's license number

7. Social security number and/or Federal EIN

8. Description of vehicle

9. Capacity of propulsion tank(s)

10. Estimated amount of fuel in the propulsion tank(s)

11. Location of any fuel storage tanks on the vehicle

12. Vehicle identification number (VIN)

13. License plate number

14. Dates of registration period

(10) The Service employee should obtain the following information to establish who is responsible for the presence of dyed fuel in the on-road vehicle:

1. Who fueled the vehicle.

2. When the truck was fueled last.

3. Where the fuel was obtained.

4. Whether the company has fuel storage tanks at the yard.

5. Location of the company's yard.

6. Fueling practices of the company.

7. How many trucks the company operates.

8. Other information that would establish culpability and the scope of the non-compliance.

(11) The Service employee will immediately "follow the fuel," when possible and conduct follow-up inspections to determine the extent of the non-compliance. If it is determined the location is beyond an acceptable distance from which the Service employee is located, the Service employee will notify the group manager to have the information referred to another Service employee in that area for follow-up.

(12) At a minimum, the case history must document the following:

1. The delivery of Publication 1 and Notice 916 (EN/SP).

2. The site location, date, the law enforcement or agency controlling the inspection site, if applicable.

3. Contain all the necessary facts as outlined above.

(13) The actual number of vehicles screened during each inspection must be timely recorded in IMS. See IRM 4.24.13.5 for procedures about IMS.

(14) For case processing procedures, see IRM 4.24.16, Excise Fuel Compliance Report Writing, Case Processing and Appeals Procedures.

(1) The Service employee must present his/her credentials as well as provide the end-user with a Notice 916 (EN/SP) and Publication 1 prior to conducting the inspection.

(2) The Service employee will tour the facility and obtain information from the end-user to understand the operation of the business, including but not limited to the:

1. Type of business activity

2. Types of fuel used in vehicles

3. Types of fuel stored at this location

4. The number of diesel trucks owned or operated

5. Location and capacity of fuel storage tanks and the identity of the fuel supplier

6. Records of deliveries

7. Truck fueling procedure (i.e., who fuels and what directions are given by employer)

8. Records for the fueling of the trucks

9. Types and number of pieces of off-road diesel equipment

10. Portable diesel tanks used by the company

11. Safeguards in place to ensure dyed fuel is not used in a taxable manner

(3) The Service employee will screen the fuel in the on-road diesel vehicles and mobile machinery using the procedures found in IRM 4.24.15.12. If the fuel in a vehicle or mobile machinery appears to be dyed or suspicious in nature then a usage sample is obtained from each propulsion tank and from the storage tank that is the source of the dyed fuel in the vehicle and mobile machinery.

(4) The Service employee shall take photographs to support any penalty determinations.

(5) All or some of the dyed fuel in the storage tank that is the source of the fuel in the propulsion tank may be considered held for a use other than a nontaxable use and thus subject to a penalty under IRC 6715(a)(2). The number of gallons involved in the violation is determined by the evidence the taxpayer provides regarding the past and current use of dyed fuel.

• The Service will consider any credible and convincing evidence when calculating the amount of dyed fuel a person held for a use other than a nontaxable use. In accordance with Needsome Farms v. U.S , No. 97-1375-MLB, 1999 WL 131697 (D. Kan. July 16, 1999), in the absence of credible evidence to the contrary, all dyed fuel held in the storage tank may be presumed to be involved in the violation.

• The Service employee should obtain information from the taxpayer on the past and current use of dyed fuel and determine the number of gallons of stored dyed fuel subject to a penalty. The amount of dyed fuel determined to be held for use in a taxable manner should be based solely on the evidence of past and current use by the taxpayer.

(6) The Service employee should obtain information to determine the culpable parties. Joint and several liability may apply.

(7) The Service employee should "follow the fuel" to determine the extent of the non-compliance. If geographically necessary, the Service employee should notify the group manager to have the information referred to another Service employee in the appropriate area for follow-up.

(8) Follow-up inspections will be conducted to ensure the taxpayer is compliant. Follow-up inspections to re-check previously penalized propulsion and bulk tanks are considered a separate inspection for the purposes of correctly calculating multiple violations and should be entered into IMS separately.

(9) If directed by management or the circumstances warrant, the Service employee may obtain sulfur samples of undyed diesel or gasoline to be tested for adulterants.

(10) If directed by management or the circumstances warrant, the Service employee may obtain samples of dyed fuel to ensure the dye concentration has not been altered. An IRC 6715(a)(3) penalty may apply to the end-user, fuel supplier or other person. See IRM 20.1.11.6.1.3, Willful Alteration of Dye Concentration, etc. The following apply in this situation:

1. Service employees must identify the supplier(s) of the fuel.

2. The sample is considered a field "concentration" sample.

(11) When proposing a penalty, at a minimum, the case history documentation must include the following:

1. Taxpayer identification number (EIN/SSN).

2. Taxpayer name.

3. Site address and office address of the taxpayer. Both addresses must be input into IMS.

4. The reason the site was selected for inspection.

5. Identification of the individual that authorized the inspection.

6. Delivery of Publication 1 and Notice 916 (EN/SP).

7. The site information fueling practices (i.e., who fuels and what directions are given by employer).

8. If storage tanks are identified (i.e., marked on-road/off-road).

9. Comments on fuel storage capacity.

10. Identity of fuel supplier(s).

11. Results of the screening of company vehicles and fueling practices.

12. License plate numbers, when samples are secured.

13. Samples taken and sampling procedures utilized.

14. Photographs, if taken to support a penalty determination.

15. Lab results and date the sample results received.

16. Information obtained from the tour and interview.

17. Date the penalty package was issued.

(12) Inspections that result in a no adverse action, at a minimum, the case history documentation must include:

1. Taxpayer identification number (EIN/SSN).

2. Taxpayer name.

3. Site address and office address of the taxpayer. Both addresses must be input into IMS.

4. The reason the site was selected for inspection.

5. Identification of the individual that authorized the inspection.

6. Comments as to what actions the Service employee took (i.e., sampling, screening, required notice) to determine that the taxpayer was in compliance, and the results of those actions.

7. Lab results (if applicable).

8. Date the closing letter was issued.

9. Additional information, as warranted.

(1) To ensure IRC 6715(a)(1) and IRC 6715(a)(2) penalties are based on the best possible evidence, the Service employee will take all reasonable efforts to obtain fuel samples from each vehicle or storage tank subject to the penalty. These efforts include traveling to sites at which the taxpayer’s trucks or fuel storage tanks are located.

(2) The Service employee must contact the group manager if circumstances hinder or prevent the Service employee from obtaining a sample.

(3) An IRC 6715(a)(1) or IRC 6715(a)(2) penalty may be proposed without a fuel sample if the Service employee visually detects that the fuel in the vehicle or storage tank is dyed but is unable to obtain a sample using the approved sampling method. For example, the Service employee detects dyed fuel in a propulsion tank during a properly administered pipette screening but the Service employee is unable to obtain a sample using the sampling pump method.

(4) Under no circumstances will a Service employee propose a IRC 6715(a)(1) or IRC 6715(a)(2) based solely on the testimony of the owner, employee or third party. The oral or written testimony should prompt further investigation.

(5) The Service employee must record within IMS the steps taken to obtain a sample and, if a sample was not obtained, explain the basis for proposing the penalty without a sample being drawn.

(6) Some states with whom the IRS has information sharing agreements, do not provide fuel samples to the IRS but provide the results from tests administered in the field or by a state-contracted laboratory. In such instances, the test results are sufficient to support whether the fuel is dyed.

(1) The group manager will ensure all necessary supplies are available prior to the beginning of a blitz activity. These supplies include but are not limited to:

1. Blitz data input sheets

2. Form 9667, Sample Bottle Seals and Identification Labels

3. Pre-printed "To/From" labels

4. Prepared Form 4564, Information Document Request (IDR)

5. Copies of Letter 3918, Fuel Inspection Letter

6. Copies of Publication 1, Your Rights as a Taxpayer

7. Copies of Notice 916 (EN/SP), Taxable Fuel Inspection Notice

(2) A list of terminals and TCNs may be provided at the beginning of the retail blitz activity.

(3) The group manager will appoint a contact person for the blitz activity. The contact person will:

1. Provide support to the Service employees.

2. Provide information to the group manager, as requested.

3. Be the contact point for taxpayers responding to an IDR left by the Service employees.

(4) The FCO group manager will refer the abnormal sample results to a FCA group manager.

(5) The FCA group manager will evaluate the EFL reports and assign any abnormal sample results to an FCA.

(6) The group manager will provide direction and information for sample collection if at another location other than a retailer or end-user.

(1) Samples of undyed diesel and jet fuel are collected from storage tanks at retailers, wholesalers, and selected terminals. Kerosene and gasoline samples may be collected if the fuel is suspicious (i.e., color, smell, location or shipping paperwork).

(2) The taxpayer is provided with a Letter 3918, Notice 916 (EN/SP) and Publication 1.

(3) Only one sample per storage tank is collected. All storage tanks must be sampled.

(4) The group manager will identify terminals to be inspected. A terminal sample must be obtained from each storage tank containing undyed diesel or jet fuel. Samples of other middle distillate products are collected, if warranted. If pulling samples from a terminal:

1. The TCN is recorded.

2. Do not obtain samples from transport compartments.

3. Do not use "retained" samples (i.e., samples previously pulled by the terminal). Ask the terminal to obtain a fresh sample from the storage tank.

(1) Samples of undyed and dyed diesel fuel are collected from storage tanks of end-users.

(2) Screen all available on-road registered diesel vehicles.

(3) Obtain a sample from at least one on-road registered diesel vehicle.

(4) On the Form 9667, record "V" for a sample from a vehicle and "S" for a sample from a storage tank. The notation should be recorded to the right of the "Blitz" space within the "Type of Test" section.

(1) Complete one blitz data sheet for each sample. The blitz data sheets should be completed as follows:

1. The handwritten data sheets must be legible (block printing is preferred), accurate and timely submitted.

2. Use abbreviations only for state names.

3. Submit only the information requested on the sheets.

4. The product is marked according to what the fuel is supposed to be (i.e., how the fuel is being sold or how the fuel is being used). For example, diesel fuel from an on-road storage tank or propulsion tank, that may be dyed is considered to be diesel, not dyed diesel.

(2) Do not record deliveries of fuel that occurred more than 60 days prior to the date of inspection.

(3) Form 4564 should be completed if the taxpayer is not able to provide the required information at the time of the inspection. The Service employees must inform the designated blitz contact person of the issuance of any IDR(s). The form shall be completed, as follows:

1. The form should be prepared in duplicate. One copy is given to the person representing the taxpayer during the inspection and the other is sent to the designated blitz contact person.

2. The form should be directed to the person responsible for providing the information.

3. The taxpayer should be asked to provide the information within 24 hours to the designated contact person.

4. The designated contact person will fax information received from the taxpayer to the EFL within 24 hours of receipt.

5. The Service employee should notate in the notes section of the blitz data sheet that a Form 4564 was issued.

6. The designated contact person should follow-up with the taxpayer if the information is not received from the taxpayer within 24 hours.

(1) See IRM 4.24.15.17 for general guidance on packing and shipping samples.

(2) Verify that the sample numbers on the blitz data sheets match the Form 9667 sample numbers on the bottles.

(3) Place the original blitz data sheets in a sealed envelope marked "To be opened by addressee only" and include it in the box with the samples.

(4) Handwrite "B" on one of the blank sides of the shipping box.

(5) Samples shall be shipped on the last day of the blitz activity, or at the end of each week, if the project duration is greater than one week.

(6) It is strongly recommended the Service employee make a copy, photograph or scan each blitz data sheet into the laptop prior to enclosing the forms in the box.

(1) All blitz inspections must be input into IMS within five business days following the end of the sample collection period. The Service employee is responsible for updating the IMS case file and issuing the appropriate closing letter.

(2) See IRM 4.24.13.5, Issue Management System (IMS), for procedures about IMS.

(3) Each group is assigned a blitz tracking code. The code must be entered into IMS under the ERCS Data Tab.

(4) For each blitz inspection created on IMS, the SAIN number will reflect the type of inspection; e.g., 515, 516R, 516W, and 518.

(1) For samples determined to be abnormal, the group manager will send the test results to the Service employee who conducted the inspection and the FCA or revenue agent who will follow-up on the result. The group manager or designated Service employee must send the lab result to the Service employee within one business day of receiving notification from the lab.

(2) A request from the EFL for additional samples or information should be forwarded by the group manager to the Service employee. The person following up on the initial sample will not necessarily be the same person who sent the first sample. The manager must send the request for additional samples or information to the Service employee within one business day of receiving notification from the lab.

(3) Follow-up samples are considered blitz samples. Instructions for labeling and shipping the samples must be followed. See IRM 4.24.15.15, and IRM 4.24.17, Packing and Shipping Samples. The blitz data sheet must indicate the sample is a follow-up and identify the original sample number(s).

(4) If abnormal results are not received within 15 calendar days of shipping the samples, the blitz cases may be moved to a closing status in IMS. The Letter 3143, Non-violation IRC 6715 Inspection Letter, must be issued at this time. For certain blitz projects, the 15 day period may be extended. The Service employee will be notified by the group manager if the time period is extended.

(1) The Service employee will record the content of the sulfur notice label on the pump in the IMS case history.

(2) The Service employee will review BOLs and delivery tickets and obtain the following information pertaining to each of the last three shipments of diesel fuel:

1. Name and address of the supplier

2. Date of shipment

3. The gallons received

4. The amount of fuel in the tank at the time of delivery

5. The identification of previous fuel type stored in the tank (if different from the current type)

6. The name of person who placed the orders for the fuel

7. Other possible sources of the product in the storage tank (consider possible upstream and downstream sources)

8. Additives placed in the fuel

9. The sulfur statement and, if applicable, the biodiesel blend percentage

(3) Only lab results that indicate possible sulfur concentration violations are forwarded. If a lab result is not received within 15 days from the date the sample was shipped, Service employees may assume the sulfur concentration was within the allowable level.

(1) All samples must be shipped in two-ounce glass bottles with one-ounce fill lines. Fuel samples secured should be one ounce in volume. See IRM 4.24.15.15.2 for additional guidance pertaining to securing samples.

(2) Ensure there are no cracks or chips in the sample bottles used.

(3) Caps with a plastic, cone-shaped seal inside the cap must be used.

(1) The request to collect investigative samples may come from a variety of sources such as:

1. The Service employee comes upon an unusual and suspicious fuel product.

2. IRS Criminal Investigation requests that certain fuel be collected and analyzed for content.

3. State agencies, acting under a memorandum of understanding (MOU).

4. An excise manager requests that a taxpayer’s product be analyzed to see if it is what the taxpayer says it is, or what the agent and manager suspect it is.

(2) FCOs may work with FCAs and revenue agents in securing samples to determine whether

• Biodiesel registrants and applicants meet the requirements of IRC 40A(d)(1), Biodiesel and renewable diesel used as fuel; biodiesel, which defines biodiesel

• Renewable registrants and applicants meet the requirements for renewable fuel

(1) The samples must be obtained using one of the approved sampling methods discussed above. See IRM 4.24.15.13.

(2) Eight one-ounce samples are collected from each source of fuel for which investigative sample testing is requested, including biodiesel and renewable fuels.

(3) Eight one-ounce samples are collected from each source for gasoline samples requiring octane measurements.

(4) A completed Form 14403, Investigative Sample Information, must be included with the shipment to alert the EFL chemist of what is suspected and what tests should be done. This completed form gives the chemist a starting point for the investigation. Form 14403 includes the following information:

1. Service employee's name.

2. Date sampled.

3. IRS sample label number from Form 9667.

4. Type of sample source (i.e., storage tank, saddle tank, wholesaler, etc.).

5. Expected product (i.e., number 1 diesel, number 2 diesel, biodiesel, renewable etc.).

6. Reason for sample analysis (why was this sample secured?).

   Note: An example of a statement explaining the reason for the sample would be: "Fuel may be mixed with used motor oil, PCBs and other waste products. Test for adulterants to verify. Provide the name of the adulterant(s) and the percentage of each."

7. Relationship between samples (if any).

8. Any other pertinent information. All 637 registration samples should indicate the applicable type of registration (e.g. AB, NB, S) and the registrant’s name and taxpayer identification number (TIN).

9. Name, address, secure e-mail address, fax number and phone number of the person(s) to whom the lab analysis will be sent. The results are normally sent to the Service employee or another individual who requested the investigative sample be obtained.

   Note: It is important the contact information for the Service employee needing the results be provided.

10. The lab analysis is communicated to the individuals identified on the Form 14403 regardless of the results within five business days of the receipt of the samples at the lab.

    Note: Analysis results of renewable or complex "investigative" samples may require longer than five business days.

(5) See IRM 4.24.15.15 for the required label information on the Form 9667.

(6) See IRM 4.24.15.16 for information on the chain of custody.

(1) See IRM 4.24.15.17 for general instructions on packing and shipping samples.

(2) Place the completed Form 14403 into the box.

(1) If the results from an IRS initiated sample indicate the need for further development, a referral should be completed within one day of the receipt of the EFL results. SeeIRM 4.24.13.9.1, Referral Procedures, for instructions on completing a referral.

(2) A revenue agent may request the assistance of an FCO or FCA, if additional samples will be collected. The request is routed through the group manager who will assign a Service employee based on factors including, but not limited to, proximity to the site and availability.

(3) The revenue agent may request an FCO or FCA obtain samples from sources upstream. The FCO or FCA should discuss with his/her manager the need for reassignment if the upstream site is outside of their assigned territory.

(1) Unless otherwise notated, these instructions apply to any sample type.

(2) FCS (FCO/As) I.D. - enter the assigned four or five digit FCO/FCA identification number.

(3) Date - enter the date the sample was collected.

(4) Type of Test (Check only one) - select the applicable test. See IRM 4.24.15.15 for the correct type of test to select for the tests performed. Checking a single type of test on the label automatically triggers several tests to be performed. For blitz samples obtained from an end-user, record a "V" for a sample obtained from a vehicle or a "S" for a sample obtained from a storage tank. Exceptions to selecting only one test:

1. Select "637 registration" in addition to "Investigative" if the sample pertains to a fuel-related 637 registration other than biodiesel (e.g. renewable fuel, blocked pump)

2. Select "Biodiesel" in addition to "Investigative", if the sample was obtained to determine if it meets ASTM standards

(5) Declared Product - mark the space to the right of the declared fuel type. The declared fuel type is the product the paperwork or taxpayer indicates the product to be.

1. If the product is unknown, or does not fit the types on the label, indicate within the "Other" field what the fuel is alleged to be. This space may also be used to direct the EFL to an enclosed statement that provides more details regarding the sample. Heating oil, fuel oil, locomotive, or marine fuel should be designated in the "other" field, if applicable.

2. If the Biodiesel test is selected within the "Type of Test" section, input the percentage of biodiesel within the "Bio Percent" space. For Form 637 biodiesel producer registration testing, the percentage is normally 100 percent. If the product is a biodiesel blend, also select the blending product, usually #1 Diesel or #2 Diesel.

3. No entry is made in the "Bio Percent" field if no biodiesel is present.

4. All gasoline samples should have an octane rating and percent of ethanol.

(6) TCN or City/State - For samples obtained from terminals record the TCN. For other samples, record the city and state information.

(7) Number of bottles associated with the sample (record the number). Ensure the correct number of samples are obtained. See IRM 4.24.15.15.2.

(8) All information entered in the Chain of Custody and Case File sections must match the corresponding information recorded in the Bottle Label section.

(1) The matrix below identifies the tests performed, sample instructions, required paperwork and the reports generated. Review the "Tests Performed" section of this matrix to select the appropriate type of test on Form 9667.

(1) When custody of a sample is relinquished to another party, Form 13926 is completed to record the sample number, the names of the parties involved, the date each party received the sample, and the date when custody was relinquished.

(2) One control document should be used for each sample and the document should be updated to reflect each transfer of custody. Examples of when this form must be used are:

1. When a sample is transferred between fuel compliance employees.

2. When a sample is transferred from a state official to an FCO or FCA.

(3) The properly completed form must include the:

1. Sample number.

2. Name of individual with custody of the sample.

3. Agency of the individual with custody of the sample.

4. Signature of the individual with custody of the sample.

5. Date the individual with custody of the sample received and relinquished control of the sample.

(4) This form must be placed in the shipping box with the fuel samples to which it pertains.

(5) In addition, Form 13927 must also be completed and accompany the relinquished samples.

(1) Form 13927 must be completed by Service employees for every box of samples relinquished to the shipping company and sent to the EFL. If the shipment contains greater than five samples, an additional Form 13927 will be completed and included in the shipping box.

(2) The Service employee must manually complete this form.

(3) The properly completed form must include the following:

1. The shipping company tracking number.

2. The name of the individual shipping the samples.

3. The position title and phone number of the individual shipping the samples.

4. The description of the sample (i.e., diesel, kerosene, dyed diesel).

5. The type (i.e., usage, concentration, biodiesel).

6. The signature of shipper, shipping company and date shipped.

(4) The information on the Form 13927 must match the information on the Form 9667 for the corresponding sample.

(5) This form must be placed in the shipping box with the fuel samples to which it pertains.

(1) 49 CFR 173.4a and IATA 2.6 allow a maximum of 30 ml (approximately one fluid ounce) per "inner packaging." An "inner packaging" is defined as one sample bottle.

(2) The approved shipping box has two layers and can hold up 12 bottles per layer for a total of 24 bottles. Only "approved" shipping boxes should be used to ship the two ounce bottles.

(3) The maximum number of sample bottles permitted in each box is dependent on the fuel product(s) to be shipped. Two or more products may be shipped in the same box but if jet fuel with a flash point less than 73 degrees, gasoline, undefined product, transmix or waste oil are shipped, no more than 15 total samples may be shipped in the box.

1. Diesel fuel and kerosene - maximum of 24 bottles.

2. Jet fuel with a flash point less than 73 degrees (Jet B, not typically used) - maximum of 15 bottles.

3. Jet fuel with a flash point greater than 73 degrees and less than 140 degrees (Jet A and Jet A-1) - maximum of 24 bottles.

4. Gasoline - maximum of 15 bottles.

5. Transmix - handle as gasoline with a maximum of 15 bottles. Transmix samples are only secured when directed by management, or as part of an examination.

6. Undefined product or waste oil - a maximum of 15 bottles.

(4) Packing procedures:

1. Construct an approved shipping box and tape the bottom.

2. Construct the sample compartment divider for the bottom tier and place it into the plastic bag.

3. Place the compartment divider and large plastic bag into the box.

4. Ensure the outside of the sample bottle is clean, dry and labeled properly.

5. The bottle should be sealed firmly with a cap, but do not over tighten, as that may cause the cap to crack. Check to ensure no leakage. Re-bottle and create new paperwork if the bottle is leaking. The Service employee must record all re-bottling actions taken in the IMS case file.

6. Ensure the sample is listed on the chain of custody document(s) and wrap each two-ounce bottle with one piece of absorbent material.

7. Insert the wrapped bottle into an individual plastic bag.

8. Seal the individual sample bag (do not use tape to seal the bag).

9. Place each sample into the box within one of the inner compartments in the bottom tier. Samples may only be placed in the inner compartments of the box.

10. Place the flat cardboard tier divider on top of the bottom tier.

    Note: Only one flat cardboard tier divider is needed per shipping box and it should be placed between the bottom and top tiers.

11. Construct the top level sample tier by placing the assembled sample compartment divider directly on top of the flat compartment divider. The bottom level sample tier, the tier divider, and the top level sample tier must all be in the shipping box, regardless of the number of samples in the box.

12. Seal the large plastic bag with tape or a twist tie supplied with the shipping box.

(1) All samples shall be shipped overnight using the current approved contract carrier and transportation mode.

(2) All air bills must be completed electronically.

(3) No Saturday or Sunday deliveries should be requested. Samples may be shipped on Friday, but do not indicate on the air bill for the package to be delivered during the weekend.

(4) Ship samples to:

IRS Excise Forensics Laboratory

2400 Stevens Drive

Richland, WA 99354

Attention: Tessa Oxford

Phone:(509) 371-6647

(5) Samples must be shipped to the EFL within five business days of being taken. Extensions may be granted by the group manager, if warranted. The Service employee will follow the agreement in the Memorandum of Understanding (MOU) between the IRS and the state agency for samples obtained by a state employee as part of an MOU.

(6) Include in the box with the samples:

1. Form 13927 for all shipments.

2. Form 13926, if applicable. The Service employee must record the shipping company tracking number in the box entitled "air bill number" on the Form 13927.

3. See IRM 4.24.15.14.3 for more information on what should be included in the shipping box for Investigative samples.

4. See IRM 4.24.15.8.5 for more information on what should be included in the shipping box for Blitz samples.

(7) Seal the shipping box with packaging tape.

(8) The shipping box must contain the required excepted quantities marking in red or black. The marking must not be covered by any other labels or written on. The marking for excepted quantities is pre-printed on the box.

(9) The identified shipping account should not be used for any purposes other than to ship fuel.

(10) The shipping box must remain in the custody of the shipper until it is taken to a shipping company location that accepts dangerous goods. The box must not be left in the mail room, hotel front desk, or other location for pick-up. Failure to comply with these instructions will break the chain-of-custody.