[Code of Federal Regulations]
[Title 26, Volume 16]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR49.4264(b)-1]

[Page 264-265]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (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

[[Page 265]]

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.