What the Form Is For

IRS Form 637 is the registration application businesses must file if they engage in certain activities subject to federal excise taxes or want to claim excise tax benefits. Think of it as a specialized business license that tells the IRS you're qualified to handle certain tax-exempt transactions or claim tax credits related to specific industries.

The form covers activities under four main Internal Revenue Code sections: 4101 (fuel-related activities), 4222 (tax-free sales of certain articles), 4662 (certain chemical transactions), and 4682 (ozone-depleting chemicals). Common users include fuel producers, refiners, terminal operators, manufacturers of certain products like fishing equipment or tires, chemical manufacturers, and businesses involved in biofuel or alternative fuel production.

If approved, you receive a Letter of Registration (Letter 3689) with your unique registration number. This isn't just paperwork—it's a public statement from the IRS that you've been vetted and meet all requirements to conduct specific tax-advantaged activities. Without this registration, you could face significant penalties and lose the ability to buy or sell products tax-free or claim important tax credits. IRS.gov Form 637

What IRS Form 637 Is For

IRS Form 637 is the registration application businesses must file if they engage in certain activities subject to federal excise taxes or want to claim excise tax benefits. Think of it as a specialized business license that tells the IRS you're qualified to handle certain tax-exempt transactions or claim tax credits related to specific industries.

The form covers activities under four main Internal Revenue Code sections: 4101 (fuel-related activities), 4222 (tax-free sales of certain articles), 4662 (certain chemical transactions), and 4682 (ozone-depleting chemicals). Common users include fuel producers, refiners, terminal operators, manufacturers of certain products like fishing equipment or tires, chemical manufacturers, and businesses involved in biofuel or alternative fuel production.

If approved, you receive a Letter of Registration (Letter 3689) with your unique registration number. This isn't just paperwork—it's a public statement from the IRS that you've been vetted and meet all requirements to conduct specific tax-advantaged activities. Without this registration, you could face significant penalties and lose the ability to buy or sell products tax-free or claim important tax credits. IRS.gov Form 637

When You’d Use IRS Form 637

Late/Amended Filings

Initial Registration

You must register before starting any activity that requires registration. This is crucial—engaging in registered activities without approval can trigger penalties of $10,000 for the initial failure, plus $1,000 for each day you continue operating unregistered. The law requires you to be proactive, not reactive. IRS 637 Registration Program

Changes and Amendments

You don't file an "amended" Form 637 in the traditional sense. Instead, you must notify the IRS within 10 days whenever significant information changes. This includes address changes, changes in business activities, or modifications to your ownership structure. For minor updates, contact the IRS office where you're registered directly rather than submitting a new form.

Reregistration Requirements

Special rules apply to certain fuel activities under IRC 4101. If your business experiences a change of more than 50% ownership, you must completely reregister by filing a new Form 637. This means that after a major sale, merger, or ownership transfer, the new owners need their own registration number—the old one gets revoked. Importantly, this requirement doesn't apply to companies whose stock is regularly traded on established securities markets, recognizing the impracticality of tracking such changes for public companies.

Additional Activities

If you're already registered for one activity but want to add another, you'll need to contact the IRS to modify your registration rather than starting from scratch. Each business unit with a separate Employer Identification Number (EIN) needs its own Form 637—parent companies and subsidiaries are treated as separate entities.

Key Rules or Details for 2021

Registration Tests

Depending on your activity, you must pass up to three tests. The Activity Test verifies you're actually engaged in (or will soon be engaged in) the activity you're registering for—the IRS looks at your business experience, financial standing, contracts, state licenses, and tax returns. The Acceptable Risk Test ensures neither you nor related persons have been penalized for wrongful acts like tax fraud, felony convictions involving theft or false statements, or previous registration revocations. The Adequate Security Test examines whether you have adequate financial resources and a satisfactory tax history, or alternatively, you can post a bond.

Mandatory vs. Optional Registration

Some activities require registration (like being a blender, terminal operator, pipeline operator, or producer of biodiesel or alcohol), while others allow optional registration to receive benefits (like purchasing certain products tax-free). Make sure you know which category your activity falls into.

Related Persons

The IRS scrutinizes not just your business but also "related persons"—anyone who owns 5% or more of your company, officers, members, or anyone who exercises control over your registered activities. If a related person has tax problems or a criminal history involving tax fraud, it can disqualify your application. Form 637 PDF

Bond Requirements

For certain high-risk activities (typically those involving activities K, M, S, or Y under IRC 4101), the IRS may require you to post a bond to guarantee tax payment. The bond amount varies based on your specific situation and risk profile.

Employer Identification Number

You must have an EIN before applying. If you don't have one, you need to apply using Form SS-4 first. Each separate business unit with its own EIN must file separately—you cannot register multiple entities under one application.

Step-by-Step (High Level)

Step 1: Determine Your Activity Letter(s).

Review pages 2-5 of Form 637, which contain a detailed chart listing all activity letters (like M for blender, S for terminal operator, AB for agri-biodiesel producers). Identify which letter(s) match your business activities. You can register for multiple activities on one form if applicable.

Step 2: Gather Required Documentation.

Each activity letter requires specific "Additional Information." For example, fuel producers must provide details about production facilities, annual volumes, and business partners. Manufacturers must list products and describe their operations. Gather all business licenses, contracts, facility descriptions, and operational details before starting.

Step 3: Complete Part I – Identification.

Enter your legal business name exactly as it appears on your EIN documentation, along with your EIN, trade name, mailing address, phone, and fax. If you use a P.O. box, you must also provide your physical street address.

Step 4: Complete Part II – Activities.

Enter each activity letter and a brief description of what you do. Attach the additional information required for each activity (specified in the chart on pages 2-5).

Step 5: Complete Part III – General Information.

Section A applies to everyone—answer questions about whether you file Form 720, previous registration applications, ownership changes, business start date, related entities, business operations, and where you keep records. Sections B and C apply only to fuel applicants, addressing ownership changes and potential disqualifying factors like past penalties or convictions.

Step 6: Sign and Date.

The form must be signed by someone with legal authority to bind your business—sole proprietors sign themselves, partnerships need a general partner, LLCs follow their tax treatment structure, and corporations need an authorized officer (president, vice president, treasurer, or similar).

Step 7: Submit.

Fax your completed form to 855-887-7735 or mail it to: Department of the Treasury, Internal Revenue Service, Excise Operations Unit—Form 637, Mail Stop 5701G, Cincinnati, OH 45999.

Step 8: Await IRS Review.

The IRS may conduct an inspection of your business premises during normal business hours without advance notice. They'll verify your operations match what you described and that you meet all registration tests.

Common Mistakes and How to Avoid Them

Mistake #1: Operating Before Approval.

Many businesses assume filing Form 637 means they're immediately registered. Wrong. You're not registered until the IRS issues Letter 3689 (Letter of Registration) with your registration number. A copy of your submitted Form 637 is not proof of registration. Operating without approval triggers harsh penalties. How to avoid: Wait for your official Letter of Registration before conducting any registered activities.

Mistake #2: Incomplete Additional Information.

Each activity letter has specific documentation requirements listed on pages 2-5. Missing even one element delays processing or leads to denial. How to avoid: Use the chart as a checklist. For example, if you're registering as a fuel blender (Activity M), you must list products purchased for blending, annual volumes bought, and annual volumes of blended fuel produced—no shortcuts.

Mistake #3: Wrong Signature Authority.

Forms signed by someone without legal authority to bind the business are invalid. An office manager or bookkeeper typically cannot sign unless they have specific corporate authorization. How to avoid: Review the signature requirements carefully. Corporations need officers; partnerships need general partners; LLCs follow their tax structure.

Mistake #4: Failing to Report Related Persons.

Applicants often overlook officers, shareholders, or partners when listing related parties. If a related person with 5% or more ownership has tax problems, your application can be denied. How to avoid: In Part III, Section A, line 6, list everyone—all business owners, corporate officers, members, and partners, with their taxpayer identification numbers.

Mistake #5: Not Disclosing Ownership Changes.

For fuel-related activities, if your ownership changed more than 50% in the past two years, you must disclose this in Part III, Section B, line 8. Failing to disclose can result in registration revocation later. How to avoid: Be transparent about all ownership transitions, even if they occurred before you started your current business activities.

Mistake #6: Using the Wrong EIN.

If you're a subsidiary, branch, or division of a larger company, you need to determine whether you have (or need) your own EIN. Parent companies and subsidiaries are separate entities requiring separate registrations. How to avoid: Verify your EIN with your tax professional before applying. If multiple business units exist, each needs its own Form 637.

What Happens After You File

Initial Processing

Your application is received at the Cincinnati IRS Center, date-stamped, and forwarded to the Centralized Specialty Tax Operations (CSTO) for initial processing. The IRS enters your information into their Issue Management System (IMS) for tracking.

Review and Inspection

An IRS examiner reviews your application to determine if you meet all registration tests. For many activities—especially fuel-related ones—the IRS may visit your business premises during normal business hours without advance notice to verify your operations, inspect facilities, and confirm you have the infrastructure described in your application. For certain fuel producers (like biodiesel or sustainable aviation fuel), you may need to provide fuel samples for testing.

Request for Additional Information

If anything is unclear or incomplete, the IRS will contact you for clarification. Respond promptly to avoid delays. Processing times vary significantly depending on the complexity of your activity, whether inspections are needed, and whether you need to post a bond.

Approval

If approved, you receive Letter 3689 (Approval of Excise Tax Registration), which includes your activities, effective registration date, and unique registration number. This letter is your proof of registration—keep it safe. Your registration remains valid indefinitely until revoked, though the IRS conducts periodic compliance reviews.

Denial

If your application is denied, you receive written notification explaining the specific reasons. You can address the issues and reapply. Common denial reasons include failing the Acceptable Risk Test (past penalties or convictions), inadequate financial resources, inability to verify your business operations, or incomplete documentation.

Ongoing Compliance

Once registered, you must comply with all "Terms and Conditions of Registration" specific to your activity. The IRS may conduct follow-up compliance reviews—sometimes within 12 months for certain high-risk activities. You must notify the IRS within 10 days of any changes to information submitted on your application. Failure to maintain compliance can result in registration revocation.

Verification

Anyone can verify your registration status using the IRS's online tool at IRS Registration Status Check by entering your registration number and activity letter.

FAQs

Q1: How long does it take to get approved?

A: Processing times vary widely. Simple registrations with complete documentation might take 4-8 weeks, but complex applications requiring inspections, fuel sampling, or bonding can take several months. Submit your application well in advance of when you need to begin operations.

Q2: Can I operate while my application is pending?

A: No. You must wait for official approval (Letter 3689) before engaging in any registered activities. Operating without registration can result in $10,000 initial penalties plus $1,000 per day.

Q3: Do I need to renew my Form 637 registration periodically?

A: No, registrations don't expire. Once approved, your registration remains valid until revoked. However, you must notify the IRS of changes within 10 days and may need to reregister if ownership changes exceed 50% (for certain fuel activities).

Q4: What's the difference between a Certificate of Registry and a Letter of Registration?

A: These are essentially the same thing—the IRS now issues Letter 3689 for all approved registrations. Older registrations may have received different letter designations, but they function identically as proof of approved registration.

Q5: If I'm registered for one activity, can I easily add another?

A: You can apply to add activities to your existing registration, but you cannot simply submit a new Form 637. Instead, contact the IRS office where you're registered to request adding activity letters. Each new activity will be evaluated according to its specific registration tests.

Q6: What if my business partner has a past tax problem—will that disqualify me?

A: It depends. If a related person (someone owning 5% or more, officers, or anyone controlling registered activities) was penalized for wrongful acts, it typically triggers failure of the Acceptable Risk Test. However, the IRS may still approve your application if you can demonstrate the registration doesn't create significant risk of tax nonpayment—factors include time elapsed since the penalty, present relationship with that person, degree of rehabilitation, and bond amount offered.

Q7: Can I appeal if my registration is denied or revoked?

A: Yes. If denied or revoked, you receive written notification with specific reasons. You can address those issues and reapply, or pursue appeals through the IRS Independent Office of Appeals if you believe the denial was improper. The letter you receive will include information about your appeal rights.

For more information and the most current version of Form 637, visit IRS.gov Form 637 or contact the IRS Excise Tax office. This guide is based on the 2021 form and IRS guidance; always verify current requirements before filing.