Form 8924 Excise Tax on Certain Transfers of Qualifying Geothermal

Form 8924 ( XX-2008), Excise Tax on Certain Transfers of Qualifying
Geothermal or Mineral Interests
Purpose: This is the first circulated draft of the new Form 8924 for your review and
Comments. See below for a discussion of the form.
TPCC Meeting: None, but one may be arranged if requested.
Prior Version: There is no prior version of this form.
Other Products: Circulations of draft tax forms, instructions, notices, and publications
are posted at: http://taxforms.web.irs.gov/Circulations/index.htm.
Comments: Please email, fax, call, or mail any comments by March 17, 2008 to me at
the address below and email the form’s reviewer, Sharon Dewsbury, at
Sharon.A.Dewsbury@irs.gov.
Kelli Slaton
Tax Forms and Publications
SE:W:CAR:MP:T:B
Phone: 202-283-2734
Email: Kelli.M.Patilla2@irs.gov
Major changes to Form 8924 ( XX -2008)
Form 8924 is a new form which is used to compute and report the tax due on the transfer
of certain mineral rights by an eligible entity when the entity originally received the
rights in a conservation sale. This form was created by P.L. 109-432, section 403.

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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Form 8924, PAGE 1 of 2
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO FOOT
PAPER: WHITE WRITING, SUB. 20. INK: BLACK
FLAT SIZE: 216 mm (8 1⁄ 2 ") x 559 mm (22") FOLD TO: 216 mm (8 1⁄ 2 ") x 279 mm (11")
PERFORATE: (ON FOLD)

Date

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

Form

8924

Action

Date

O.K. to print
Revised proofs
requested

Excise Tax on Certain Transfers of Qualifying
Geothermal or Mineral Interests

(Rev. XX-2008)
Department of the Treasury
Internal Revenue Service

OMB No. 1545-xxxx

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Name of entity

Signature

See instructions below.

Employer identification number

Number, street, and room or suite no. (If a P.O. box, see instructions)
City or town, state, and ZIP code

Tax Computation (see instructions)
1

Date of sale or other disposition (MM/DD/YYYY)

2

If the property was sold or exchanged, enter the sales price of the interest
transferred. If the property was leased, enter the income realized as a result
of the transfer

2

3

Cost or other basis of interest transferred. Enter -0- if the property was leased

3

4

Gain or income realized. Subtract line 3 from line 2. If zero or less, enter -0-

4

5

Fair market value of the interest transferred on the date shown on line 1

5

6

Multiply line 5 by 20% (.20)

6

7

Multiply line 4 by 35% (.35)

7

8

Tax. Add lines 6 and 7

8

9

Tax paid with Form 7004

9

10

Tax due. Enter the excess, if any, of line 8 over line 9

10

11

Overpayment. Enter the excess, if any, of line 9 over line 8

11

Sign
Here
Paid
Preparer’s
Use Only

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Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and
statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer
(other than taxpayer) is based on all information of which preparer has any knowledge.

©

Your signature

Preparer’s
signature

©

Firm’s name (or
yours if self-employed),
address, and ZIP code

Date
Date

©

Title
Check if
self-employed

Preparer’s SSN or PTIN

EIN
Phone no. (

)

a conservation sale or a transfer in which
no income or gain was recognized must
file Form 8924 for each transfer.

● Form 8924 tax has previously been paid
as a result of a prior transfer of ownership
or possession of the same interest.

Purpose of Form

Relief from liability. An entity is not
required to file Form 8924 if:

When To File

Use Form 8924 to report and pay the
excise tax on certain transfers of qualifying
geothermal or mineral interests.

● The transferee is an eligible entity which
provides the organization with a qualifying
letter of intent at the time of the transfer,

File Form 8924 by the later of April 30,
2008, or the 90th day following the taxable
transfer. If you need more time to file, use
Form 7004, Application for Automatic
6-Month Extension of Time To File Certain
Business Income Tax, Information, and
Other Returns, by the due date of Form
8924. Form 7004 does not extend the time
for payment of tax.

General Instructions
Section references are to the Internal
Revenue Code.

Who Must File
An eligible entity who subsequently
transfers ownership or possession (by sale,
exchange, or lease) of a qualifying mineral
or geothermal interest that was acquired in

● The transferee that is not an eligible
entity establishes to the satisfaction of the
Secretary of the Treasury that the transfer
of ownership or possession will be
consistent with section 170(h)(5) and
provides the organization a qualifying letter
of intent at the time of the transfer, or

For Paperwork Reduction Act Notice, see instructions.

Privacy Act and

Cat. No. 37736P

Form

8924

(Rev. XX-2008)

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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Form 8924, PAGE 2 of 2
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO FOOT
PAPER: WHITE WRITING, SUB. 20. INK: BLACK
FLAT SIZE: 216 mm (8 1⁄ 2 ") x 559 mm (22") FOLD TO: 216 mm (8 1⁄ 2 ") x 279 mm (11")
PERFORATE: (ON FOLD)

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

Form 8924 (Rev. xx-2008)

Amended Return
To amend a previously filed Form 8924, file a
corrected Form 8924 and write “Amended” at
the top of the form.

Where To File
File Form 8924 with the Department of the
Treasury, Internal Revenue Service Center,
Cincinnati, OH 45999.

Rounding Off to Whole
Dollars
You may show money items on the return as
whole dollars. To do so, drop any amount
less than 50 cents and increase any amount
from 50 cents through 99 cents to the next
higher dollar.

Signature
See the instructions for the Signature section
of your federal income tax return.

Interest and Penalties
Interest. Interest is charged on taxes not
paid by the due date at a rate determined
under section 6621.
Late filing of return. A penalty of 5% a
month or part of a month, up to a maximum
of 25%, is imposed on the net amount due if
Form 8924 is not filed when due.
Late payment of tax. Generally, the penalty

1/2 of for not paying tax when due is ½ of 1% of

the unpaid amount, up to a maximum of
25%, for each month or part of a month the
tax remains unpaid. The penalty is imposed
on the net amount due.

Definitions
Bureau of Land Management land. This
term means the Bureau of Land Management
land and any federally-owned minerals
located south of the Blackfeet Indian
Reservation and east of the Lewis and Clark
National Forest to the eastern edge of R. 8
W., beginning in T. 29 N. down to and
including T. 19 N. and all of T. 18 N., R. 7 W.
Conservation sale. A conservation sale
means a sale which meets the following
requirements.
● The transferee of the qualifying mineral or
geothermal interest is an eligible entity.
● At the time of the sale, the transferee
provides the entity with a qualifying letter of
intent.
● The sale is not made pursuant to an order
of condemnation or eminent domain.
Eligible federal land. The term eligible
federal land means the Bureau of Land
Management land and the Forest Service
land as generally depicted on the map
entitled Rocky Mountain Front Mineral
Withdrawal Area and dated December 31,
2006.

Page

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Eligible entity. An eligible entity means:
● A governmental unit referred to in section
170(c)(1) or an agency or department thereof
operated primarily for 1 or more of the
conservation purposes specified in clause (i),
(ii), or (iii) of section 170(h)(4)(A), or
● An entity that is described in section
170(b)(1)(A)(vi) or section 170(h)(3)(B) and
organized and at all times operated primarily
for 1 or more of the conservation purposes
specified in clause (i), (ii), or (iii) of section
170(h)(4)(A).

Entire interest. An interest in any mineral or
geothermal deposit is not an entity’s entire
interest if the interest in that mineral or
geothermal deposit was divided in order to
avoid the requirements of a qualifying mineral
or geothermal interest or section 170(f)(3)(A).
An entity’s entire interest in such deposit
does not fail to be a qualifying mineral or
geothermal interest solely because the entity
has retained an interest in other deposits,
even if the other deposits are contiguous with
such certain deposit and were acquired by
the entity along with such certain deposit in a
single conveyance.
Forest Service land. This term means the
Forest Service land and any federally-owned
minerals located:

● In the Rocky Mountain Division of the
Lewis and Clark National Forest, including the
approximately 356,111 acres of land made
unavailable for leasing by the August 28,
1997, Record of Decision for the Lewis and
Clark National Forest Oil and Gas Leasing
Environmental Impact Statement and that is
located from T. 31 N. to T. 16 N. and R. 13
W. to R. 7 W.; and
● Within the Badger Two Medicine Area of
the Flathead National Forest including the
land located in T. 29 N. from the western
edge of R. 16 W. to the eastern edge of R. 13
W., T. 28 N., Rs. 13, and 14 W.
Qualifying mineral or geothermal interest.
A qualifying mineral or geothermal interest
means an interest in any mineral or
geothermal deposit located on eligible federal
land that constitutes the entity’s entire
interest in the deposit.
Qualifying letter of intent. A qualifying letter
of intent means a written letter of intent that
includes the following statement: The
transferee’s intent is that this acquisition will
serve 1 or more of the conservation purposes
specified in clause (i), (ii), or (iii) of section
170(h)(4)(A) of the Internal Revenue Code of
1986, that the transferee’s use of the deposits
so acquired will be consistent with section
170(h)(5) of such Code, and that the use of
the deposits will continue to be consistent
with such section, even if ownership or
possession of such deposits is subsequently
transferred to another person.

street address and the organization has a
P.O. box, show the box number instead of
the street address.

Tax Computation
Line 5

Enter the fair market value of the interest the
ownership or possession of which is
transferred. The fair market value is
determined at the time of the transfer.

Line 9

If Form 7004 was filed, enter the amount of
tax paid, if any, when that form was filed.

Line 10

The tax due must be paid in full when Form
8924 is filed. Make the check or money order
payable to the United States Treasury. Write "
the entity’s name, address, identifying
number, and Form 8924 on the check or
money order.

Line 11

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Privacy Act and

The IRS will refund the amount on line 11 if
no other taxes are owed.
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 average time
is:
Recordkeeping
Learning about the law
or the form
Preparing and sending
the form to the IRS

4 hr., 4 min.
42 min.
47 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. You can
write to the Internal Revenue Service, Tax
Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution
Ave., NW, IR-6526, Washington, DC 20224.
DO NOT send the tax form to this address.
Instead, see Where To File above.

Specific Instructions
Name and address. Enter the name shown
on your most recently filed federal income
tax return. Include the suite, room, apartment,
or other unit number after the street address.
If the Post Office does not deliver mail to the

Section 6109 requires return preparers to
provide their identifying numbers on the
return.