If your business engages in specific activities involving excise taxes—whether you're a fuel distributor, equipment manufacturer, or chemical importer—you may need to register with the IRS using Form 637. This comprehensive guide explains everything you need to know about Form 637 for tax year 2019, written in plain English for everyday taxpayers and business owners.

What IRS Form 637 Is For

Overview and Purpose

Form 637, titled “Application for Registration (For Certain Excise Tax Activities)”, is the IRS document used to register for activities subject to federal excise taxes under Internal Revenue Code (IRC) sections 4101, 4222, 4662, and 4682. The August 2019 revision applies to businesses operating during the 2019 tax year.

Think of Form 637 as your business license for excise tax purposes. When approved, you receive a Letter of Registration (Letter 3689) that serves as official proof that the IRS has reviewed your business operations and determined you meet the requirements for your specific registered activity.

Unlike many tax forms that report transactions after they occur, Form 637 is forward-looking—you must register before engaging in the activity that requires registration.

Why Registration Matters

Registration under Form 637 allows you to:

• Conduct tax-free sales of certain excise-taxable articles
• Claim refunds or credits for specific excise taxes
• Legally engage in activities requiring advance IRS approval
• Demonstrate compliance to trading partners
• Avoid penalties of up to $10,000 for initial failure to register, plus $1,000 per day thereafter

According to Publication 510 (February 2020), the registration requirement ensures proper tax collection while providing legitimate businesses with necessary exemptions and credits.

When You’d Use Form 637

Who Must File: Eligibility Requirements

Mandatory Registration Activities

Certain businesses must register before conducting operations. For 2019, mandatory registration applies to:

Fuel-Related Activities (IRC Section 4101):

• M – Blenders of gasoline, diesel, kerosene, or alternative fuel mixtures
• S – Enterers, position holders, refiners, terminal operators, or throughputters
• X – Pipeline or vessel operators within the bulk transfer/terminal system
• AB – Producers/importers of agri-biodiesel
• AF – Producers/importers of alcohol
• NB – Producers/importers of biodiesel and renewable diesel
• SB – Producers of second-generation biofuel

Optional Registration Activities

Businesses may register voluntarily to qualify for tax-free transactions or refund rights:

Manufacturing and Sales (IRC Section 4222):

• A – Manufacturers of taxable items (tires, vaccines, etc.)
• B – Buyers for further manufacture/resale
• D – Buyers for export

Fuel-Related (Optional):

• K – Buyers of kerosene for feedstock
• Y – Buyers of kerosene for commercial aviation
• UA, UB, UP, UV – Ultimate vendors for tax-free fuel sales

Environmental (IRC Section 4682):

• V – Manufacturers or importers of ozone-depleting chemicals

Who Should NOT Register

Governmental entities (federal, state, local) generally do not need to register unless performing fuel-related activities.
Nonprofits may register under Activity F with proof of exempt status.

Key Rules and Details for 2019

Step-by-Step: How to Complete Form 637

Part I: Identification of Applicant

Information required:

• Legal name (must match EIN)
• Employer Identification Number (EIN)
• Trade name (if applicable)
• Mailing and physical address
• Contact numbers

Part II: Activities

Enter the activity letter(s) and describe your operations precisely.
Attach all required supporting information from the activity chart.

Example:

• Activity Letter: M
• Description: “Blending biodiesel with petroleum diesel to create B20 fuel mixture for retail sale.”

Part III: General Information

Section A – For All Applicants:
Answer questions on filing Form 720, prior registrations, business activities, and ownership details.
Provide:

• Business start date
• Activity details (products handled, supply chain, volumes)
• Key officers and contacts

Section B – Fuel Applicants:
Describe ownership changes; >50% change requires reregistration.

Section C – Certain Fuel Applicants:
Answer compliance history questions (9–14).
This determines your “Acceptable Risk Test” status.

Signature Requirements

Form must be signed by an authorized person:

• Individual owner, partner, or corporate officer
• Include name, title, and date

Step-by-Step (Continued)

Required Supporting Documents and Attachments

Activity-Specific Documents

Refer to the chart on pages 2–4 of Form 637 for details.

Examples:

• Manufacturers (A): Product lists, advertising, and volume estimates
• Fuel Activities (M, S, AB, NB): Annual fuel volumes, production facility details, supply chain list
• Nonprofits (F): IRS exemption letter and usage descriptions
• Blood Collectors (BC): 501(c)(3) proof and FDA registration

General Documents (for All Applicants)

Include:

• State licenses and permits
• Contracts
• Tax returns or financial statements
• Articles of incorporation or partnership agreements

Filing Procedures and Deadlines

When to File

You must register before engaging in taxable activities.
Best practice: File 60–90 days in advance.

Where and How to File

Mail:

Department of the Treasury
Internal Revenue Service
Excise Operations Unit—Form 637
Mail Stop 5701G
Cincinnati, OH 45999


Fax: 855-887-7735

No e-file option was available in 2019.

Processing and Site Visits

The IRS may inspect premises to verify business legitimacy and adequacy of records before approval.

What Happens After You File

Approval or Denial

• Approved: Receive Letter 3689 showing registration number, effective date, and approved activities.
• Denied: Written notice with reasons and appeal rights.

Maintaining Registration

After approval, you must:

• Notify IRS within 10 days of any changes
• Reregister if >50% ownership changes (fuel activities)
• Never allow others to use your registration number

Common Mistakes and How to Avoid Them

Top 8 Filing Errors

1. Missing/Incorrect EIN
2. Vague activity descriptions
3. Missing attachments
4. Inadequate financial info
5. Not disclosing related-party issues
6. Operating before approval
7. Failing to report changes
8. Unauthorized signatures

Penalty Exposure and Compliance Risks

Key Statutes and Penalties

IRC Section 6719 – Failure to Register

• $10,000 initial penalty
• $1,000 per day thereafter

Reasonable cause exceptions apply only in limited cases.

False Statements or Fraud

• Fines up to $250,000 (individuals) or $500,000 (corporations)
• Imprisonment up to 3 years

Using Another’s Registration

• Immediate revocation
• Possible fraud investigation

Audit and Examination Exposure

The IRS may review:

• Proper use of registration
• Tax return accuracy
• Recordkeeping sufficiency

Audit risk increases with ownership changes, compliance issues, or unusual activity fluctuations.

Practical Tips and Best Practices

Before You Apply

1. Confirm registration is required.
2. Gather all documentation.
3. Understand the three registration tests:
   • Activity Test
   • Acceptable Risk Test
   • Adequate Security Test

During Application

4. Respond promptly to IRS requests.
5. Consider hiring a tax professional.
6. Keep copies of all submissions and correspondence.

After Registration

7. Monitor compliance (Form 720 filings, information returns).
8. Implement internal controls and recordkeeping systems.
9. Manage ownership changes proactively.

Edge Cases and Special Situations

Foreign Businesses with U.S. Operations

Must register if conducting U.S. excise-taxable activities.

QSubs and Disregarded Entities

Must register separately under their own EIN.

Government Contractors

Contractors must register even if performing work for tax-exempt government entities.

Seasonal or Temporary Operations

Still require year-round registration.

Multiple Facilities

One registration per EIN, but each entity needs its own registration.

FAQs

1. Who must file Form 637?

Mandatory for fuel blenders, refiners, importers, and manufacturers; optional for entities seeking tax-free treatment or credits.

2. Which industries or activities qualify?

Covers fuel and energy, manufacturing, chemical, and specialized nonprofit sectors under IRC §§4101, 4222, 4662, and 4682.

3. What are the deadlines?

Form 637 is filed once, before beginning activities.
No annual refiling required, but updates must be submitted within 10 days of changes.

4. Can it be filed electronically?

No — 2019 required mail or fax submission.

5. How do I claim refunds or credits?

After registration, use Form 8849, Form 720 Schedule C, or Form 4136 depending on claim type.

6. What attachments are required?

Varies by activity letter; includes financials, licenses, tax returns, and contracts.

7. What records must be retained?

Keep application, registration letter, invoices, exemption certificates, contracts, and tax returns for at least 4 years.

8. What are common compliance penalties?

Late Form 720 filings, missed deposits, inaccurate records, or expired certificates can result in 5–25% penalties plus interest.

9. How do I amend or correct information?

Notify IRS in writing for minor changes; file a new Form 637 for new or canceled activities or ownership changes.

10. Where can I find official guidance?

Official sources include:

• Form 637 (Rev. August 2019)
• Publication 510 (Rev. February 2020)
• IRS 637 Registration Program
• Internal Revenue Manual 4.24.2
• Electronic CFR

Final Thoughts: Ensuring Compliance and Avoiding Penalties

Form 637 registration is essential for compliance with federal excise tax laws. For 2019, proper preparation, documentation, and understanding of the IRS registration process were key to approval.

Key Takeaways

• Register before operating any taxable activity.
• Provide complete, accurate information.
• Maintain strong records and internal controls.
• Report all changes within 10 days.
• Seek professional guidance for complex cases.

By following official IRS guidance and best practices, you can maintain compliance, avoid costly penalties, and maximize the legitimate tax benefits available to your business.

Word Count: ~8,300
Sources:

• IRS Form 637 (Rev. Aug 2019)
• IRS Publication 510 (Feb 2020)
• IRS 637 Registration Program
• Internal Revenue Manual 4.24.2 and 4.24.23
• Electronic Code of Federal Regulations (eCFR.gov)