6478 Credit for Alcohol Used as Fuel

2007 Form 6478, Credit for Alcohol Used as Fuel
Purpose: This is the first circulated draft of the 2007 Form 6478, Credit for Alcohol
Used as Fuel, for your review and comments. The major changes are listed
below.
TPCC Meeting: None, but one may be arranged if requested.
Prior Version: The 2006 Form 6478 is available at:
http://www.irs.gov/pub/irs-pdf/f6478.pdf
Other Products: Circulations of draft tax forms, instructions, notices, and
publications are posted at:
http://taxforms.web.irs.gov/draft_products.html
Comments: Please email, fax, call, or mail any comments to me and email the
reviewer, William Woolf, Jr. @ [email protected] by July 13, 2007.

Mike Cyrus
Tax Forms and Publications
SE:W:CAR:MP:T:B:C
Email: [email protected]
Ph: 202.927.9545
Fax: 202.622.3262

2007 Form 6478 Major Changes
On the Form

1] On line 6, the text "column (c)" is removed because it is unnecessary. The text
“continue on” is changed to “go” (on line 11, also).
2] The year is updated on lines 9 and 10, and in the usual places.
3] Two changes regarding lines 17a and 17b:
• Lines 17a and 17b (representing the foreign tax credit and the personal
tax credits from Forms 1040 (or 1040NR)) are switched in place (reordered) because IRC 26(a)(2) does not (yet) provide for the old ordering
of the credits/lines.
• On Line 17a (old line 17b), the Form 1040 and 1040NR line references
are changed to conform to changes on the 2007 forms.
4] On line 17c the text is changed to: Credits from Forms 5735 and 8834. This is
to allow for the new American Samoa economic development credit (PL 109-222,
sec. 119(a)).
5] On lines 17d and 17e, the text “Non-business” is added to the names of the
credits for clarity.
6] Line 22 is expanded to allow for the credits which do not flow through the Form
3800, conforming to other forms which have been similarly expanded. This
expansion is due partly to P.L. 110-28, section 8214, which waived the AMT for
the IRC section 51 and 48B credits. There are now so many credits not flowing
through the Form 3800 that an actual listing of such credits on affected forms is
warranted. Also for this reason, the Caution in the Part II heading is removed.
7] On line 24, the reference to Form 1120-A is removed because the form is
obsolete for 2007.
In the Instructions
1] Information re Form 8835 is removed (see #6 above).
2] In the line 14 instructions, the reference to Form 1120-A is removed because
the form is obsolete for 2007.
3] The line 22 instructions are removed (see #6 above).
4] The year is updated in the usual places.

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transmitted all R
text files for this
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Date

I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 1 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form

Action

Date

Signature

O.K. to print
Revised proofs
requested

OMB No. 1545-0231

6478

Credit for Alcohol Used as Fuel

2007

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©

Department of the Treasury
Internal Revenue Service

Attach to your tax return.

Attachment
Sequence No.

83

Identifying number

Name(s) shown on return

Caution: You cannot claim any amounts on Form 6478 that you claimed (or will claim) on Schedule C (Form 720), Form 8849, or
Form 4136.

Part I

Current Year Credit
Type of Alcohol Fuel

1

(a)
Number of Gallons of
Alcohol Sold or Used

(b)
Rate

(c)
Column (a) x Column (b)

*

Qualified ethanol fuel production (in gallons)
1
$.10
(see instructions for election)
Alcohol 190 proof or greater and alcohol 190 proof or greater
$.51
2
in fuel mixtures
Alcohol less than 190 proof but at least 150 proof and alcohol
$.3778
3
less than 190 proof but at least 150 proof in fuel mixtures
4
Add the amounts in column (c) on lines 1, 2, and 3. Include this amount in your income for 2007 (see instructions)
5
Alcohol fuel credit from a partnership, S corporation, cooperative, estate, or trust (see instructions)

2
3
4
5

Add lines 4 and 5. Partnerships and S corporations, report this amount on Schedule K. All others,
go to line 7
Alcohol fuel credit included on line 6 from passive activities (see instructions)
Subtract line 7 from line 6
Alcohol fuel credit allowed for 2007 from a passive activity (see instructions)
Carryforward from 2006 and carryback from 2008 of the alcohol fuel credit (see instructions)
Add lines 8 through 10. Cooperatives, estates, and trusts, go to line 12. All others, use this
amount to complete Part II
Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see
instructions)
Cooperatives, estates, and trusts. Subtract line 12 from line 11. Use this amount to complete
Part II

6
7
8
9
10
11
12
13

*

b
c
d
e
f
18
19
20
21
22a
b

11
12

13
Only the rate for ethanol is shown. See instructions for lines 2 and 3 for rates for alcohol other than ethanol.

Part II
14
15
16
17a

6
7
8
9
10

Allowable Credit

Regular tax before credits (see instructions)
Alternative minimum tax (see instructions)
Add lines 14 and 15
Credits from Form 1040, lines 47 through 50 and 52 through 54 (or
17a
Form 1040NR, lines 44, 45, and 47 through 49)
17b
Foreign tax credit
17c
Credits from Forms 5735 and 8834
17d
Non-business alternative motor vehicle credit (Form 8910, line 18)
Non-business alternative fuel vehicle refueling property credit (Form
17e
8911, line 19)
Add lines 17a through 17e
Net income tax. Subtract line 17f from line 16. If zero, skip lines 19 through 22 and enter -0- on
line 23
19
Net regular tax. Subtract line 17f from line 14. If zero or less, enter -0-

Enter 25% (.25) of the excess, if any, of line 19 over $25,000 (see instructions)
Subtract line 20 from line 18. If zero or less, enter -022a
General business credit (Form 3800, line 19)
Empowerment zone and renewal community employment credit (Form
22b
8844, line 26)
22c
c Work opportunity credit (Form 5884, line 22)
d Add lines 22a through 22c
23 Subtract line 22d from line 21. If zero or less, enter -024 Credit allowed for the current year. Cooperatives, estates, and trusts. Enter the smaller of
line 13 or 23. Report this amount on Form 1120-C, Schedule J, line 5c; or Form 1041, Schedule
G, line 2c. If line 23 is smaller than line 13, see instructions. All others. Enter the smaller of line
11 or 23. Report this amount on Form 1040, line 55; Form 1040NR, line 50; Form 1120, Schedule
J, line 5c; or the applicable line of your return. If line 23 is smaller than line 11, see instructions
For Paperwork Reduction Act Notice, see instructions.

Cat. No. 13605J

14
15
16

17f
18
20
21

22d
23

24
Form

6478

(2007)

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 2 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2007)

General Instructions

Page

● Alcohol of less than 150 proof. In figuring the proof of
any alcohol, disregard any denaturants (additives that
make the alcohol unfit for human consumption). The
volume of alcohol includes any denaturant up to 5% of
the volume of the alcohol and denaturant combined.
The alcohol must not be a mixture with gasoline or
special fuel (other than as a denaturant). The credit is for
alcohol which during the tax year you:
● Used as a fuel in a trade or business, or
● Sold at retail to another person and put in the fuel
tank of that person’s vehicle.
However, no credit is allowed for alcohol you used
as a fuel in a trade or business if that alcohol was sold
in a retail sale described above.
Alcohol Fuel Mixture
The alcohol must be used to make a qualified mixture.
A qualified mixture combines alcohol with gasoline or
special fuel. The producer of the mixture either:
● Used it as fuel, or
● Sold it as fuel to another person.
The credit is available only to the producer who
blends the mixture. The producer must use or sell the
mixture in a trade or business and the credit is
available only for the year the mixture is sold or used.
The credit is not allowed for casual off-farm production
of a qualified mixture.

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Section references are to the Internal Revenue Code.

Purpose of Form

2

Use Form 6478 to figure your credit for alcohol used as
fuel. You claim the credit for the tax year in which the
sale or use occurs. This credit consists of the:
● Alcohol mixture credit,
● Alcohol credit, and
● Small ethanol producer credit.
You may claim or elect not to claim the alcohol fuel
credit at any time within 3 years from the due date of
your return (determined without regard to extensions)
on either an original or an amended return for the tax
year of the sale or use.
Caution: Before claiming a credit on Form 6478, the
alcohol fuel mixture credit must be taken against any
section 4081 liability on Form 720. Any credit in
excess of the section 4081 liability can be taken as a
claim for payment on Form 8849 or an income tax
credit on Form 4136.

Definitions and Special Rules
Qualified Ethanol Fuel Production
This is ethanol produced by an eligible small ethanol
producer (defined below) which during the tax year:
1. Does not exceed 15 million gallons;
2. Is sold by the producer to another person—
● For use by the buyer in the buyer’s trade or business
to produce a qualified mixture (other than casual
off-farm production),
● For use by the buyer as a fuel in a trade or business,
or
● Who sells the ethanol at retail to another person and
puts the ethanol in the retail buyer’s fuel tank; or
3. Is used or sold by the producer for any purpose
described in 2 above.
Eligible Small Ethanol Producer
This is a person who, at all times during the tax year,
has a productive capacity for alcohol of 60 million
gallons or less. This capacity includes alcohol made
from petroleum, natural gas, coal, peat, and alcohol of
less than 150 proof.
Alcohol
Alcohol, for credit purposes, includes ethanol and
methanol but does not include the following.
● Alcohol produced from petroleum, natural gas, or coal
(including peat). Methanol produced from methane gas
formed in waste disposal sites is not alcohol produced
from natural gas, and is included for credit purposes.

Registration

All producers and importers of alcohol with a proof of at
least 190 must be registered with the IRS. See Form
637, Application for Registration (For Certain Excise Tax
Activities).
Coordination With Excise Tax Credit

Only one credit may be taken with respect to any gallon
of alcohol in a mixture reported on line 2. If any amount
is claimed (or will be claimed) with respect to any gallon
of alcohol on Form 720, Quarterly Federal Excise Tax
Return, Form 8849, Claim for Refund of Excise Taxes,
or Form 4136, Credit for Federal Tax Paid on Fuels, then
a claim cannot be made on Form 6478 for that gallon of
alcohol.
Recapture of Credit
You must pay a tax on each gallon of alcohol (or the
alcohol in the mixture) at the rate you used to figure
the credit if you:
● Separate the alcohol from the mixture,
● Use the mixture other than as a fuel,
● Mix alcohol on which the credit was allowed for the
retail sale,
● Use the alcohol other than as a fuel, or
● Do not use the fuel for the purposes described under
Qualified Ethanol Fuel Production.
Report the tax on Form 720.

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 3 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2007)

Specific Instructions
Part I. Current Year Credit

Page

Note. We have shown in column (b) the rate for
ethanol only. If you have a credit for alcohol other than
ethanol, enter in column (b) the applicable rate shown
in the instructions for lines 2 and 3.

Enter the number of gallons of ethanol, up to 15 million
gallons, that meet the conditions listed under Qualified
Ethanol Fuel Production on page 2. Multiply by the rate
of 10 cents per gallon.
Important: The amount of the credit determined for
lines 2 and 3 below with respect to alcohol in qualified
mixtures must be reduced by the excise tax benefit for
qualified methanol or ethanol fuel reflected on Form
720. See sections 40(c) and 4041(b)(2).
Line 2

● The amount of the small ethanol producer credit
included as part of the pass-through credit;
● The number of gallons claimed at the entity level for
the small ethanol producer credit; and
● The productive capacity of the entity.

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Use lines 1 through 3 to figure any alcohol fuel credit
from your own trade or business.

Line 1

3

Enter the number of gallons of alcohol that is 190
proof or greater and alcohol that is 190 proof or
greater in qualified mixtures (mixtures of alcohol and
gasoline or alcohol and special fuels). For alcohol other
than ethanol, the rate is 60 cents per gallon.
Line 3

Enter the number of gallons of alcohol that is less than
190 proof but at least 150 proof and alcohol that is
less than 190 proof but at least 150 proof in qualified
mixtures (mixtures of alcohol and gasoline or alcohol
and special fuels). For alcohol other than ethanol, the
rate is 45 cents per gallon.
Line 4

The total credit shown in column (c) on lines 1, 2, and 3,
must be included in income under “other income” on
the applicable line of your income tax return, even if you
cannot use all of the credit because of the tax liability
limit. However, if you are subject to the alternative
minimum tax (AMT), this amount is not income in
computing AMT and must be subtracted when figuring
your alternative minimum taxable income. Do this by
including this amount on line 26 of Form 6251, line 23 of
Schedule I, Form 1041, or line 2o of Form 4626.
Line 5

Enter the amount of credit that was allocated to you as
a partner, shareholder, patron, or beneficiary.
If your credit from a pass-through entity includes the
small ethanol producer credit, you, as a partner,
shareholder, patron, or beneficiary, are subject to the
15-million-gallon limitation for line 1 and the
60-million-gallon productive capacity limitation for an
eligible small ethanol producer. If you receive a small
ethanol producer credit from more than one entity, your
credit may be limited.
Line 6

If the credit includes the small ethanol producer credit,
the partnership (other than an electing large partnership)
or S corporation must provide the following additional
information:

Line 7

Enter the amount included on line 6 that is from a
passive activity. Generally, a passive activity is a trade
or business in which you did not materially participate.
Rental activities are generally considered passive
activities, whether or not you materially participate. For
details, see Form 8582-CR, Passive Activity Credit
Limitations (for individuals, trusts, and estates), or
Form 8810, Corporate Passive Activity Loss and Credit
Limitations (for corporations).
Line 9

Enter the passive activity credit allowed for the 2007
credit for alcohol used as fuel from Form 8582-CR or
Form 8810.
Line 10

Carryforward. Use line 10 to show any carryforward of
the credit from 2006. For carryforwards of the credit
from years prior to 2005, show such carryforwards on
line 6 of Form 3800.
Carryback. Use line 10 to show any carryback if you
amend your 2007 return to carry back an unused credit
from 2008.
Line 12

Estate or trust. Allocate the credit for alcohol used as
fuel on line 11 between the estate or trust and the
beneficiaries in the same proportion as income was
allocated and enter the beneficiaries’ share on line 12.
If the credit includes the small ethanol producer
credit, the estate or trust must provide the following
additional information:
● The amount of the small ethanol producer credit
included as part of the pass-through credit;
● The number of gallons claimed by the estate or trust
for the small ethanol producer credit; and
● The productive capacity of the estate or trust.
Cooperative election to allocate the small ethanol
producer credit to patrons. A cooperative described in
section 1381(a) can elect to allocate any part of the
small ethanol producer credit to patrons of the
cooperative. To make the election, attach a statement
to the effect that the cooperative elects to allocate the
credit pro rata among the patrons eligible to share in
patronage dividends on the basis of the quantity or
value of business done with or for the patrons for the
tax year.
The election is not effective unless:
● The statement described above is attached to the
timely filed tax return (including extensions) for the tax
year associated with the election. However, if you
already made the election on a tax return filed before
June 15, 2006, but failed to attach the required
statement to that tax return, attach the statement to
your next filed return.

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 4 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2007)

Page

● The cooperative designates the apportionment in a
written notice mailed to its patrons during the payment
period described in section 1382(d). The cooperative
must also provide to its patrons the following additional
information:
● The number of gallons claimed by the cooperative.
● The productive capacity of the cooperative.
If you timely filed your return without making an
election, you can still make the election by filing an
amended return within 6 months of the due date of the
return (excluding extensions). Write “Filed pursuant to
section 301.9100-2” on the amended return.
Once made, the election cannot be revoked.

Part II. Allowable Credit

Line 14

Line 24

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The credit allowed for the current year may be limited
based on your tax liability. Use Part II to figure the
allowable credit.

Enter the regular tax before credits from the following
line of the appropriate form or schedule.
● Individuals: Form 1040, line 44; Form 1040NR, line 41.
● Corporations: Form 1120, Schedule J, line 2; or the
applicable line of your return.
● Estates and trusts: The sum of the amounts from
Form 1041, Schedule G, lines 1a and 1b; or the amount
from the applicable line of your return.
Line 15

Enter the alternative minimum tax (AMT) from the
following line of the appropriate form or schedule.
● Individuals: Form 6251, line 35.
● Corporations: Form 4626, line 14.
● Estates and trusts: Form 1041, Schedule I, line 56.
Line 20

See section 38(c)(5) for special rules that apply to
married couples filing separate returns, controlled
corporate groups, regulated investment companies,
real estate investment trusts, and estates and trusts.

4

If you cannot use all of the credit because of the tax
liability limit, carry the unused credit back 1 year then
forward up to 20 years.
Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal
Revenue laws of the United States. You are required to
give us the information. We need it to ensure that you
are complying with these laws and to allow us to figure
and collect the right amount of tax.
You are not required to provide the information
requested on a form that is subject to the Paperwork
Reduction Act unless the form displays a valid OMB
control number. Books or records relating to a form or
its instructions must be retained as long as their
contents may become material in the administration of
any Internal Revenue law. Generally, tax returns and
return information are confidential, as required by
section 6103.
The time needed to complete and file this form will
vary depending on individual circumstances. The
estimated burden for individual taxpayers filing this
form is approved under OMB control number
1545-0074 and is included in the estimates shown in
the instructions for their individual income tax return.
The estimated burden for all other taxpayers who file
this form is shown below.
Recordkeeping
7 hr., 53 min.
Learning about the
law or the form
35 min.
Preparing and sending the form
to the IRS
45 min.
If you have comments concerning the accuracy of
these time estimates or suggestions for making this
form simpler, we would be happy to hear from you.
See the instructions for the tax return with which this
form is filed.

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