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entitled 'Fiscal Year 2011 Agreed-Upon Procedures for Excise Tax 
Distributions to the Airport and Airway Trust Fund' which was released 
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GAO-140R: 

United States Government Accountability Office: Washington, DC 20548: 

November 3, 2011: 

The Honorable Calvin L. Scovel III: Inspector General:
U.S. Department of Transportation: 

Subject: Fiscal Year 2011 Agreed-Upon Procedures for Excise Tax 
Distributions to the Airport and Airway Trust Fund: 

Dear Mr. Scovel: 

We have performed the procedures described in the enclosure to this 
letter, which we agreed to perform and with which you concurred, 
solely to assist your office in ascertaining whether the net excise 
tax revenue distributed to the Airport and Airway Trust Fund (AATF) 
for the fiscal year ended September 30, 2011, is supported by the 
underlying records. 

We conducted the engagement in accordance with U.S. generally accepted 
government auditing standards, which incorporate certain financial 
audit and attestation standards established by the American Institute 
of Certified Public Accountants. 

You are responsible for the adequacy of these agreed-upon procedures 
to meet your objectives, and we make no representation in that 
respect. The procedures we agreed to perform were related to (1) 
transactions that represent the underlying basis of amounts 
distributed from the general fund to the AATF during fiscal year 2011, 

We were not engaged to perform, and did not perform, an examination, 
the objective of which would have been to express an opinion on the 
amount of net excise taxes distributed to the AATF during fiscal year 
2011. Accordingly, we do not express such an opinion. Had we performed 
additional procedures, other matters might have come to our attention 
that we would have reported to you. We completed the agreed-upon 
procedures on October 26, 2011. 

We provided a draft of this letter, along with the enclosure, to IRS 
and OTA officials for review and comment. IRS and OTA agreed with the 
results and findings presented in the enclosure relating to each 
agency's respective responsibilities as it pertains to excise tax 
distributions to the AATF during fiscal year 2011. 

This report is intended solely for the use of the Office of Inspector 
General of the U.S. Department of Transportation and should not be 
used by those who have not agreed to the procedures or have not taken 
responsibility for the sufficiency of the procedures for their 
purposes. However, the report is a matter of public record, and its 
distribution is not limited. The report is available at no charge on 
the GAO Web site at [hyperlink, http://www.gao.gov]. 

If you have any questions concerning this report, please contact me at 
(202) 512-3406 or sebastians@gao.gov. Contact points for our Offices 
of Congressional Relations and Public Affairs may be found on the last 
page of this report. 

Sincerely yours, 

Signed by: 

Steven J. Sebastian:
Director:
Financial Management and Assurance: 

Enclosure: 

[End of section] 

Enclosure: 

Airport and Airway Trust Fund Excise Tax Procedures: 

I. Procedures on Transactions That Represent the Underlying Basis of 
Amounts Distributed to the Airport and Airway Trust Fund (AATF) in 
Fiscal Year 2011: 

A. Nonstatistical selection of tax returns from the quarter ended 
September 30, 2010.[Footnote 1] 

For the quarter ended September 30, 2010, select the 30 largest excise 
tax returns containing excise taxes related primarily to the AATF and 
the Highway Trust Fund (HTF) on the basis of the total tax liability 
amount[Footnote 2] from the Internal Revenue Service's (IRS) master 
file.[Footnote 3] 

Description of Findings and Results: 

We selected 30 excise tax returns that had the largest tax liability 
related primarily to the AATF and the HTF from the quarter ended 
September 30, 2010. The selection was based on the total tax liability 
amount and type of taxes owed for each return from IRS's master file. 
The total reported excise tax liabilities on these 30 returns were 
approximately $9.5 billion, which represents 70 percent of the total 
IRS recorded excise tax liability amount of $13.6 billion for this 
quarter. Of these 30 returns, 9 contained primarily AATF-related tax 
liabilities and 21 contained primarily HTF-related tax liabilities. 

2. For each of the returns related primarily to the AATF, perform the 
following procedures: 

(a) Compare the assessment amounts for tax on transportation of 
persons by air, tax on use of international air travel facilities, and 
tax on transportation of property by air, abstracts[Footnote 4] 26, 
27, and 28, respectively, from the tax return to IRS's master file for 
agreement. 

Description of Findings and Results: 

The assessment amounts for tax on transportation of persons by air, 
tax on the use of international air travel facilities, and tax on 
transportation of property by air, abstracts 26, 27, and 28, 
respectively, on the tax return, agreed with the master file for all 
nine returns containing primarily AATF-related tax liabilities. 

(b) Calculate the assessment amounts on the tax return for the 
selected abstracts to determine whether they are mathematically 
correct. 

Description of Findings and Results: 

The taxpayers' calculations for the selected abstracts were 
mathematically correct on all nine returns containing primarily AATF- 
related tax liabilities. 

(c) Calculate the prorated collection amount[Footnote 5] for the 
selected abstracts: 

based on information from IRS's master file and compare this amount to 
the amount in IRS's Collection Certification System audit files 
[Footnote 6] for agreement. 

Description of Findings and Results: 

The independently calculated prorated collection amounts for the 
selected abstracts, based on information from the master file, agreed 
with amounts in IRS's Collection Certification System audit files for 
all nine returns containing primarily AATF-related tax liabilities. 

B. Statistical selection of attribute and monetary unit samples (MUS) 
from the quarters ended December 31, 2010, and March 31, 2011. 

1. Sampling and other procedures: 

(a) Compare excise tax collections from IRS's master file with excise 
tax collections from IRS's Collection Certification System audit files 
for each of the first two quarters of fiscal year 2011 to determine 
whether there is any variance that exceeds 1 percent of excise tax 
collections for this period. 

Description of Findings and Results: 

Excise tax collections from IRS's master file agreed with excise tax 
collections from IRS's Collection Certification System audit files, 
with less than a 1 percent variance, for each of the first two 
quarters of fiscal year 2011. 

(b) Compare excise tax collections from the IRS's master file with 
excise tax collections from IRS's general ledger for the first 9 
months of fiscal year 2011 to determine whether there is any variance 
that exceeds 1 percent of total excise tax collections for this 
period.[Footnote 7] 

Description of Findings and Results: 

Excise tax collections from IRS's master file agreed with excise tax 
collections from IRS's general ledger, with less than a 1 percent 
variance, for the first 9 months of fiscal year 2011. 

(c) Select a random attribute sample of 78 excise tax returns from 
IRS's master file. Compare assessment and receipt information for each 
return from IRS's master file to IRS's Collection Certification System 
for agreement.[Footnote 8] 

Description of Findings and Results: 

For all 78 returns, assessment and receipt information from IRS's 
master file agreed with the information in IRS's Collection 
Certification System. 

(d) Sum the prorated collections for selected abstracts[Footnote 9] 
from IRS's Collection Certification System audit files and compare 
these amounts to amounts in the Report of Excise Tax Collection 
[Footnote 10] to determine if the Collection Certification System 
properly summarized the prorated collections. 

Description of Findings and Results: 

The Collection Certification System properly summarized the prorated 
collections for all of the selected abstracts. Prorated collections 
from the audit files for the selected abstracts agreed with the 
corresponding amounts in the Report of Excise Tax Collection. 

(e) Separate the total population of prorated collections from IRS's 
Collection Certification System audit files for the first two quarters 
of fiscal year 2011 into the following distinct populations: (1) AATF, 
(2) HTF, and (3) other excise tax abstracts. Use MUS to select a 
sample of prorated excise tax collections from the AATF population 
using a confidence level of 80 percent, a tolerable misstatement of 
$106 million, and an expected aggregate error amount of $32 million. 
[Footnote 11] 

Description of Findings and Results: 

Use of MUS with a confidence level of 80 percent, a tolerable 
misstatement of $106 million, and an expected aggregate error amount 
of $32 million resulted in a sample of 65[Footnote 12] prorated excise 
tax collections for the AATF for the first two quarters of fiscal year 
2011. 

(f) Select samples of prorated excise tax collections from the two non-
AATF populations for the first two quarters of fiscal year 2011. Use 
MUS to select a sample of prorated excise tax collections from the HTF 
population using a confidence level of 80 percent, a tolerable 
misstatement of $349 million, and an expected aggregate error amount 
of $105 million.[Footnote 13] Select a random attribute sample of 45 
items from the population of prorated tax collections related to all 
excise taxes other than the AATF and the HTF.[Footnote 14] 

Description of Findings and Results: 

Use of MUS with a confidence level of 80 percent, a tolerable 
misstatement of $349 million, and an expected aggregate error amount 
of $105 million resulted in a sample of 102[Footnote 15] prorated 
excise tax collections for the HTF for the first two quarters of 
fiscal year 2011. 

A random attribute sample of 45 items was selected from the population 
of prorated tax collections related to all excise taxes other than the 
AATF and the HTF. 

2. Procedures on transactions: 

(a) For each prorated excise tax collection sampled from the AATF 
population: 

* Compare the assessment amount for the sampled item from the tax 
return to IRS's master file for agreement. 

Description of Findings and Results: 

The assessment amount on the tax return agreed with the assessment 
amount recorded in IRS's master file for each of the 65 sampled items. 

* Calculate the assessment amount on the tax return for the sampled 
item to determine whether it is mathematically correct. 

Description of Findings and Results: 

The assessment amount on the tax return was mathematically correct for 
each of the 65 sampled items. 

* Calculate the prorated collection amount for the sampled item based 
on information from IRS's master file and compare this amount to the 
amount in IRS's Collection Certification System audit files for 
agreement. 

Description of Findings and Results: 

The independently calculated prorated collection amount agreed with 
the amount in IRS's Collection Certification System audit files for 
each of the 65 sampled items. 

(b) Inspect the tax returns and master file information for the two 
samples of prorated collections from the non-AATF populations to 
determine if they contain any AATF excise tax collections. 

Description of Findings and Results: 

The two samples of 147 prorated collections from the non-AATF 
populations did not contain any AATF excise tax collections. 

(c) Statistically evaluate the results of conducting steps (a) and (b). 

Description of Findings and Results: 

For the first two quarters of fiscal year 2011, the net most likely 
error was $0 with an upper error limit of $63 million at the 80 
percent confidence level. 

II. Procedures on IRS's Quarterly AATF Receipt Certifications: 

Perform the following procedures on IRS's AATF receipt certifications 
for the quarters ended September 30, 2010; December 31, 2010; March 
31, 2011; and June 30, 2011: 

A. Inspect the certification letters for authorizing signatures. 

Description of Findings and Results: 

The certification letters for all four quarters had authorizing 
signatures. 

B. Inspect the certification letters and supporting worksheets to 
determine if evidence exists that they were reviewed by the supervisor 
or another analyst. 

Description of Findings and Results: 

There was evidence that the supervisor or another analyst reviewed the 
certification letters and supporting worksheets for all four quarters. 

C. Calculate the totals on the certification letters to determine if 
they are mathematically correct. 

Description of Findings and Results: 

The totals on the certification letters for all four quarters were 
mathematically correct. 

D. Trace the certified amounts for tax on transportation of persons by 
air (abstract 26), tax on the use of international air travel 
facilities (abstract 27), tax on transportation of property by air 
(abstract 28), and tax on kerosene for use in commercial aviation 
(abstract 77)[Footnote 16] from the certification letters back to the 
Report of Excise Tax Collection[Footnote 17] and the Treasury 90 
Report[Footnote 18] for agreement. 

Description of Findings and Results: 

The certified amounts for tax on transportation of persons by air 
(abstract 26), tax on the use of international air travel facilities 
(abstract 27), tax on transportation of property by air (abstract 28), 
and tax on kerosene for use in commercial aviation (abstract 77) from 
the certification letters agreed with the related Report of Excise Tax 
Collection and the Treasury 90 Report for all four quarters. 

E. Compare the distribution rates used by IRS for tax on 
transportation of persons by air (abstract 26), tax on the use of 
international air travel facilities (abstract 27), tax on 
transportation of property by air (abstract 28), and tax on kerosene 
for use in commercial aviation (abstract 77) for agreement with the 
applicable laws. 

Description of Findings and Results: 

The distribution rates used by IRS for tax on transportation of 
persons by air (abstract 26), tax on the use of international air 
travel facilities (abstract 27), tax on transportation of property by 
air (abstract 28), and tax on kerosene for use in commercial aviation 
(abstract 77) agreed with the applicable laws in effect during all 
four quarters. 

F. Inspect the Report of Excise Tax Collection used in the 
certification to determine if it contains more than $55 million 
[Footnote 19] in collections from prior quarters. 

Description of Findings and Results: 

None of these reports used in the certification for any of the four 
quarters contained more than $55 million in collections from prior 
quarters. 

G. For the quarter ended June 30, 2011, only, inquire with IRS whether 
any excise tax returns from its list of the largest excise taxpayers 
were omitted from the certification.[Footnote 20] For any such returns 
that were omitted but were subsequently received by IRS, report the 
total amount of AATF-related tax collections from these tax returns. 
For any such returns that were omitted and where IRS has not yet 
received these, report the average quarterly amount of AATF-related 
tax collections from the taxpayer(s) based on the previous four 
quarters. 

Description of Findings and Results: 

According to IRS, no tax returns from its list of the largest excise 
taxpayers were omitted from its certification for the quarter ended 
June 30, 2011. 

III. Procedure on Financial Management Service (FMS) Adjustments: 

Calculate the FMS adjustment amounts to AATF excise tax distributions 
based on the U.S. Department of the Treasury's Office of Tax Analysis 
(OTA) transfer forms[Footnote 21] and IRS certification letters to 
determine if they are mathematically correct for the quarters ended 
September 30, 2010; December 31, 2010; March 31, 2011; and June 30, 
2011. 

Description of Findings and Results: 

The FMS adjustment amounts for all four quarters were mathematically 
correct. These amounts were[Footnote 22] 

* $385,627,000 for the quarter ended September 30, 2010; 

* $3,901,000 for the quarter ended December 31, 2010; 

* $186,426,000 for the quarter ended March 31, 2011; and: 

* $175,144,000 for the quarter ended June 30, 2011. 

IV. Procedures on Excise Tax Distributions to the AATF for the Quarter 
Ended September 30, 2011: 

A. Determine if OTA prepares a tax rate table to capture information 
concerning tax rates, tax basis, accounts, and deposit rules in effect 
during the quarter ended September 30, 2011, and whether OTA uses this 
rate table in its trust fund estimates[Footnote 23] for the quarter. 

Description of Findings and Results: 

OTA prepared a tax rate table to capture information concerning tax 
rates, tax basis, accounts, and deposit rules in effect during the 
quarter ended September 30, 2011. OTA used the rate table in preparing 
the five semimonthly estimates that affect fiscal year 2011 
distributions to the AATF. 

B. Inspect the transfer forms and supporting schedules to determine if 
there is evidence of review. 

Description of Findings and Results: 

There was evidence that an OTA economist, other than the one who 
prepared the estimate, reviewed the transfer forms and supporting 
schedules affecting distributions from the general fund to the AATF 
for the quarter ended September 30, 2011. 

C. Calculate the totals on the transfer forms to determine if they are 
mathematically correct. 

Description of Findings and Results: 

The totals on the transfer forms affecting distributions to the AATF 
for the quarter ended September 30, 2011, were mathematically correct. 

D. Trace the transfer amounts for tax on transportation of persons by 
air (abstract 26), tax on the use of international air travel 
facilities (abstract 27), tax on transportation of property by air 
(abstract 28), and tax on kerosene for use in commercial aviation 
(abstract 77)[Footnote 24] from the transfer forms back to the related 
source documents[Footnote 25] for agreement. 

Description of Findings and Results: 

The transfer amounts for tax on transportation of persons by air 
(abstract 26), tax on the use of international air travel facilities 
(abstract 27), tax on transportation of property by air (abstract 28), 
and tax on kerosene for use in commercial aviation (abstract 77) from 
the transfer forms agreed with the related source documents for the 
quarter ended September 30, 2011. 

V. Other Procedures: 

A. Determine if IRS and OTA made adjustments to the AATF for tax on 
kerosene used in aviation during fiscal year 2011, and calculate the 
adjustment amounts to determine if they were mathematically correct. 
[Footnote 26] 

Description of Findings and Results: 

Adjustments to the AATF for tax on kerosene used in aviation were made 
during fiscal year 2011 and were mathematically correct. These amounts 
were[Footnote 27] 

* $50,580,000 for the quarter ended September 30, 2010; 

* $46,439,000 for the quarter ended December 31, 2010; 

* $45,339,000 for the quarter ended March 31, 2011; 

* $39,756,000 for the quarter ended June 30, 2011; and: 

* $44,810,000 for the quarter ended September 30, 2011. 

B. Using IRS's quarterly certifications, OTA's estimated 
distributions, and any adjustments, compile and report the amount of 
net excise taxes distributed to the AATF in fiscal year 2011. 

Description of Findings and Results: 

Based on a compilation of IRS's quarterly certifications, OTA's 
estimations, and adjustments, the amount of net excise taxes to be 
distributed to the AATF in fiscal year 2011 was $11,531,819,000. 

[End of section] 

Footnotes: 

[1] The Internal Revenue Service certification of excise tax 
distributions and corresponding U.S. Department of the Treasury 
Financial Management Service adjustment for the quarter ended 
September 30, 2010, were completed in February 2011, and thus affected 
distributions to the AATF during fiscal year 2011. 

[2] Although the certifications are based on amounts collected, we 
used the tax liability amounts to identify the taxpayers paying the 
largest amounts of excise taxes. These taxpayers generally pay their 
excise taxes in full each quarter. 

[3] The master file is a detailed database containing taxpayer 
information. 

[4] The abstract numbers identify the tax type (e.g., gasoline and 
ticket tax) and are used as the basis for determining the distribution 
of the excise taxes to the various trust funds. Abstract numbers are 
preprinted on the Form 720, Quarterly Federal Excise Tax Return, and 
are used by the taxpayer to report excise tax assessments. If the 
return was related to the AATF, we selected (1) tax on transportation 
of persons by air (abstract 26), (2) tax on the use of international 
air travel facilities (abstract 27), and (3) tax on transportation of 
property by air (abstract 28). If the return was related to the HTF, 
we selected (1) diesel fuel tax (abstract 60) and (2) gasoline tax 
(abstract 62). The tax amounts related to the selected abstracts for 
each trust fund are the largest tax amounts reported on the taxpayer's 
excise tax return and made up over 94 percent of the total amount of 
excise tax receipts certified by IRS to the AATF and over 86 percent 
of the total amount of excise tax receipts certified by IRS to the HTF 
for the quarter ended September 30, 2010. 

[5] These procedures encompassed approximately $2.2 billion in 
prorated collections affecting distributions to the AATF. IRS 
certifies to trust funds the amount of excise taxes collected. Because 
taxpayers have sometimes not fully paid their tax liability, IRS must 
allocate the amount of payments actually received among the different 
excise taxes reported on the taxpayers' returns. IRS's Collection 
Certification System prorates a taxpayer's payments proportionately 
among all taxes reported as owed on the tax return. For example, if a 
corporation reports that it owes $4 million for gasoline tax, $2 
million for diesel fuel tax, and $1 million for kerosene tax on its 
Form 720, Quarterly Federal Excise Tax Return, but has paid IRS only 
$3.5 million at the time IRS performs its certification, the program 
prorates the $3.5 million in the following manner: $2 million to 
gasoline tax, $1 million to diesel fuel tax, and $500,000 to kerosene 
tax. 

[6] The Collection Certification System produces what IRS refers to as 
audit files. These audit files contain the individual prorated 
collections by abstract and taxpayer identification number. The 
amounts certified to the trust funds are calculated by subtracting 
credits from prorated collections and then multiplying the difference 
by the applicable trust fund distribution rates. 

[7] This is a reconciliation of all excise tax collections that were 
posted to the master file and general ledger during the first 9 months 
of fiscal year 2011 and is not limited to the first two quarters. 

[8] For this sample, if one or no errors were found in our comparison 
of the 78 items, we would be 90 percent confident that the error rate 
in the population would not exceed 5 percent. 

[9] The selected abstracts are (1) tax on transportation of persons by 
air (abstract 26), (2) tax on the use of international air travel 
facilities (abstract 27), (3) tax on transportation of property by air 
(abstract 28), (4) tax on kerosene for use in commercial aviation 
(abstract 77), (5) diesel fuel tax (abstract 60), and (6) gasoline tax 
(abstract 62). The tax amounts for the four AATF-related abstracts 
made up over 98 percent of the total amount of excise tax receipts 
certified by IRS to the AATF for the quarters ended December 31, 2010, 
and March 31, 2011. The tax amounts for the two HTF-related abstracts 
made up over 91 percent of the total amount of excise tax receipts 
certified by IRS to the HTF for the quarters ended December 31, 2010, 
and March 31, 2011. 

[10] The Report of Excise Tax Collection contains prorated 
collections, classified by abstracts, which serve as the basis for 
IRS's quarterly trust fund certifications. 

[11] The $106 million tolerable misstatement represents approximately 
1 percent of the net excise tax revenue distributed to the AATF in 
fiscal year 2010. The expected aggregate error amount of $32 million 
represents approximately 30 percent of the tolerable misstatement 
amount. 

[12] The planned sample size using MUS was 145 items. MUS selects 
dollars versus specific transaction items by dividing the population 
of prorated excise tax collections by dollar intervals. The dollar 
interval for AATF was $38 million. Accordingly, any item with a dollar 
value equal to or exceeding the interval would be selected, whereas 
items less than the interval might not be selected. For example, an 
item of $78 million would cover 2 dollar intervals, but represent one 
sample item. Because large-dollar items cover more than one interval, 
the 65 unique sampled transactions selected represented 145 dollar 
intervals. 

[13] The $349 million tolerable misstatement represents approximately 
1 percent of the net excise tax revenue distributed to the HTF in 
fiscal year 2010. The expected aggregate error amount of $105 million 
represents approximately 30 percent of the tolerable misstatement 
amount. 

[14] For this sample, if no errors were found in performing procedures 
on the 45 items, we would be 90 percent confident that the error rate 
in the population would not exceed 5 percent. 

[15] The planned sample size using MUS was 146 items. As explained in 
footnote 12, MUS selects dollars instead of specific transaction items 
by dividing the population of prorated excise tax collections by 
dollar intervals. The dollar interval for HTF was $127 million. 
Because large-dollar items cover more than one interval, the 102 
unique sampled transactions selected represented 146 dollar intervals. 

[16] The certified amounts for tax on transportation of persons by air 
(abstract 26), tax on the use of international air travel facilities 
(abstract 27), tax on transportation of property by air (abstract 28), 
and tax on kerosene for use in commercial aviation (abstract 77) made 
up over 98 percent of the total amount of excise tax receipts 
certified by IRS to the AATF for each quarter of fiscal year 2011. 

[17] The Report of Excise Tax Collection is produced by the Collection 
Certification System. Collections are classified by abstract on the 
report when the related Form 720 tax return has been posted to IRS's 
master file during the processing interval covered by the report. For 
the quarter ended September 30, 2010, IRS used data from three of 
these reports, covering sequential processing intervals. Beginning in 
fiscal year 2011, IRS reprogrammed the Collection Certification System 
to capture data that better correspond to the receipt and processing 
time frames of the Forms 720 for each quarter. Consequently, IRS was 
able to use data from only one report for each quarter starting with 
the quarter ended December 31, 2010. Each report may contain 
collections related to prior quarters that IRS certifies as part of 
the current quarter's collections because the related return was not 
posted to the master file until the processing intervals covered by 
the report. 

[18] The Treasury 90 Report summarizes excise tax credit information 
and is produced quarterly by IRS service center campuses. IRS has six 
service center campuses that receive and process tax returns and 
payments. 

[19] The $55 million represents approximately 2 percent of the total 
amount of excise tax receipts certified by IRS to the AATF for each 
quarter of fiscal year 2011. 

[20] IRS maintains a listing of approximately 150 taxpayers that 
comprise its largest excise taxpayers. To help ensure that tax return 
data for the largest excise taxpayers are included in each quarterly 
excise tax certification, IRS tracks the receipt of these returns and 
contacts these taxpayers when necessary. 

[21] The transfer forms denote the amounts estimated by OTA for 
transferring excise taxes to the trust funds. 

[22] A positive amount indicates that the FMS adjustment increased 
excise taxes distributed to the trust fund. A negative amount, shown 
in parentheses, indicates that the FMS adjustment decreased excise 
taxes distributed to the trust fund. 

[23] OTA makes semimonthly estimates of excise tax collections for 
transfer to trust funds. To better match excise tax collections with 
the corresponding quarter, OTA's estimates for each quarter cover the 
period starting on the 16th day of the first month in the quarter and 
go through the 15th day of the first month of the next quarter. For 
example, OTA's estimates for the fourth quarter of fiscal year 2011 
covers July 16, 2011, through October 15, 2011. While there are six 
semimonthly estimates related to the quarter, only five of these 
affect fiscal year 2011 distributions to the AATF. The sixth 
semimonthly estimate, covering the period from October 1 through 15, 
will affect distribution to AATF for fiscal year 2012. 

[24] The OTA estimated transfer amounts for tax on transportation of 
persons by air (abstract 26), tax on the use of international air 
travel facilities (abstract 27), tax on transportation of property by 
air (abstract 28), and tax on kerosene for use in commercial aviation 
(abstract 77) made up at least 96 percent of the total amount 
transferred to the AATF for the fourth quarter of fiscal year 2011. 

[25] The source documents include the IRS report of excise taxes used 
to derive the percentages applied to reported receipts, the Daily 
Treasury Statement, the Monthly Treasury Statement, and the excise tax 
rate table. 

[26] Section 11161 of Pub. L. No. 109-59 (Aug. 10, 2005), Treatment of 
Kerosene for Use in Aviation, taxes all kerosene taxpayers at the 
standard kerosene rate, unless a taxpayer had removed the kerosene 
from a refinery or terminal directly into an aircraft's fuel tank and 
thus qualified for the lower aviation kerosene tax rate. Amounts 
received under the standard kerosene tax are initially deposited in 
the HTF. If a taxpayer subsequently used the kerosene in aviation, the 
taxpayer is eligible for the lower tax rate associated with aviation 
kerosene and can request a refund. The amount of the kerosene tax 
collected from the taxpayer, net of refunds, is transferred from the 
HTF to the AATF. 

[27] The adjustments for the quarters ended September 30, 2010; 
December 31, 2010; March 31, 2011; and June 30, 2011, were included in 
the IRS receipt certifications, and the adjustment for the quarter 
ended September 30, 2011, was included in the OTA estimates. The 
adjustment amounts represent excise taxes transferred to the AATF from 
the HTF. 

[End of section] 

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