[Code of Federal Regulations]
[Title 26, Volume 15]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR49.4264(b)-1]

[Page 264]
 
                       TITLE 26--INTERNAL REVENUE
 
                               (Continued)
 
PART 49--FACILITIES AND SERVICES EXCISE TAXES--Table of Contents
 
                  Subpart D--Transportation of Persons
 
Sec. 49.4264(b)-1  Duty to collect the tax in the case of certain refunds.

    (a) Special rule for collection of tax. Section 4264(b) provides a 
special rule for the collection of the tax where an unused ticket or 
order (or portion thereof) purchased without payment of tax is presented 
for refund and, as a result of the use of only a portion of the 
transportation purchased in connection with such ticket or order, 
liability for payment of tax has been incurred. In such a case, the 
person making the refund shall deduct the amount of the tax due, to the 
extent available, from the amount which would otherwise be refundable. 
If the redemption value of the unused ticket or order (or portion 
thereof) is less than the amount of the tax due on the amount paid for 
the travel actually performed, the person redeeming the unused ticket or 
order (or portion thereof) shall make no refund but shall apply the 
entire amount against the tax due and shall collect any additional tax 
due or, within 90 days, shall make a report of the amount of the tax 
remaining uncollected, together with the name and address of the person 
who sought the refund. The report shall be made to the office of the 
district director of internal revenue for the district in which the 
person making such report is located, and a copy of the report shall be 
furnished to the person presenting the unused ticket or order for 
redemption.
    (b) Return of tax. Any person who has made a collection of tax in 
accordance with the preceding paragraph shall include such amount in his 
regular return of taxes required to be collected under section 4291.
    (c) Illustration. A carrier receives for redemption a ticket 
purchased in the United States for transportation from Calgary, Canada, 
to Edmonton, Canada, which the purchaser bought for use in conjunction 
with a ticket for nonstop transportation from Seattle to Calgary. The 
person applying for the refund does not establish to the satisfaction of 
the carrier that the tax on the Seattle-Calgary ticket has been paid or 
that the Seattle-Calgary ticket has been redeemed. The carrier, before 
making any refund for the unused ticket, is required to deduct from the 
amount otherwise refundable the tax applicable to the amount paid by the 
purchaser for the transportation from Seattle to Calgary and to report 
the tax so collected in its quarterly return of Form 720. In the event 
that the redemption value of the unused Calgary to Edmonton ticket is 
less than the amount of the tax due on the amount paid for the 
transportation from Seattle to Calgary, the carrier should not make any 
refund but should apply against the outstanding tax the entire amount 
refundable and should either collect the balance of the tax due or make 
a report, within 90 days, to the office of the district director of 
internal revenue for the district in which the carrier is located, 
setting forth the name and address of the person seeking the refund and 
the amount of the tax remaining uncollected.