On August 10, 2004, the Internal Revenue Service (IRS) published Temporary and Final excise tax regulations and a related Notice of proposed rulemaking in the Federal Register. The regulations detail the requirements of persons who receive payments for air transportation subject to excise tax when the person liable for the tax refuses to pay it. They apply to people who receive payments that are subject to the excise tax and the people who are responsible for those taxes.
The temporary regulations require that a collector (such as a Part 135 charter operator) report to the IRS a taxpayer’s refusal to pay the excise tax. The report is due by the due date of the return on which the tax would have been reported but for the taxpayer’s failure to pay. The regulations become effective October 1, 2004.