Section 4121 of the Internal Revenue Code imposes an excise tax on domestically make coal. The taxes collected on the sales of coal are deposited to the Black Respiratory organ Disablement Trust Fund to finance payments of black respiratory organ benefits to afflicted miners.

ISSUE IDENTIFICATION

Examinations of coal producers have known many revenant issues consequent in substantial underpayments of coal excise tax liabilities. Uncle Sam's Tax Audit Assistant includes the 12 largest potential audit issues related to the coal excide tax; each section includes a detail explanation, cites the appropriate Code sections and references, and identifies helpful audit techniques.

Take a look at the following questions....If you don't cognize the answers to these questions or understand how the answers to these questions can and wish affect your tax liability - you could find yourself behind the eight ball once you meet with the Internal Revenue Service Audit Agent.

• Who is liable for the coal tax once the mineworker makes not possess an ownership interest under state law?
• Should transportation cost be excludable in inbound at the assessable sales cost of coal?
• Should the tax obligatory by IRC Section 4121 be based on raw or clear tunnage sold?
• Is the cost of adding a freeze-dried additive to coal allowed as a reduction in computing the assessable sales cost of coal?
• Is it permissible to reduce the assessable weight of coal by excess wet and what know how should be used by taxpayers in calculative this reduction in assessable weight?
• Is coal used by a producer in a thermal-dryer to dry the producer's own coal subject to the IRC Section 4121 tax?
• Is coal extracted from a river bottom by dredging operations subject to IRC Section 4121 tax on coal?
• Is a person who extracts coal from a coal refuse pile subject to IRC Section 4121?
• If coal oversubscribed is a mixture of underground and surface coal, how is the tax liability under IRC Section 4121 determined?
• How is the producer's tax liability for coal calculated once that producer besides purchases coal from unrelated producers?
• How is coal transported?
• How do you determine the FET once it is enclosed in the sale price?
• Can a producer of coal subject to IRC Section 4121 file a claim to recover an overpayment of FET?