Form 6627 – Guide to Environmental Excise Taxes

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Form 6627 is where the environmental excise tax math actually happens before any of it reaches Form 720. Across its six parts you compute the tax on petroleum, the 42 listed chemicals, imported chemical substances, and ozone-depleting chemicals, then route each part total to its own IRS number on the return. The format never moves: Column A quantity times Column B rate equals Column C tax.

For 2025 the petroleum side combines two per-barrel rates, the Oil Spill rate at $0.09 and the Superfund rate at $0.18, both flowing through Part I to specific IRS numbers on Form 720. ODC floor stocks held on January 1, 2025 are reported on second quarter filings and paid by June 30, 2025. Most of the notices we see trace back to two things: mismatched units between barrels, tons, and pounds, and totals posted to the wrong IRS number.

Key Takeaways

• Form 6627 is the schedule that computes federal environmental excise taxes, then feeds those totals to Form 720. You file it each quarter with the return.
• Petroleum taxes for 2025 combine two rates per barrel, the Oil Spill rate at $0.09 and the Superfund rate at $0.18. Both flow through Part I of Form 6627 and map to specific IRS numbers on Form 720.
• ODC tax rates are set per pound and updated for 2025. ODC floor stocks, if you meet thresholds on January 1, 2025, are reported on second quarter filings and paid by June 30, 2025.
• The format never changes, Column A quantity times Column B rate equals Column C tax, then you post totals to the right line on Form 720. E‑file together to reduce errors.
• Get the units right, barrels versus tons versus pounds. Mismatched units and wrong IRS numbers are the most common reasons for notices we see during reviews.

What Form 6627 Does, In Plain English

Form 720 is the return you file, but Form 6627 is where you prove the math behind every environmental excise line. You list each taxable item, enter the quantity in Column A, use the IRS rate in Column B, multiply for Column C, and then carry those totals to Form 720 using the IRS numbers the instructions specify.

Here is the 2025 reality you need to bake into your workflow.

• Petroleum, the oil spill financing rate stays $0.09 per barrel, and the Hazardous Substance Superfund financing rate stays $0.18 per barrel for 2025. The two are separate lines that you compute on Form 6627 Part I and post to the correct IRS numbers on Form 720.
• Chemicals, the section 4661 chemical taxes on 42 listed chemicals continue. Rates live on Form 6627 Part II, which covers chemicals other than ozone‑depleting chemicals; ODCs are excluded here and taxed separately in Parts IV through VI. Imported chemical substances under section 4671 are computed in Part III using either conversion factors or IRS‑provided substance rates, or you apply 10% of appraised entry value when no data or rate exists.
• ODCs, section 4681 rates are per pound and increased for 2025. Floor stocks tax applies if you hold ODCs on January 1, 2025 above set thresholds, reported and paid with second quarter filings by June 30, 2025.

From a reviewer’s chair, your goal is consistency. Use the same templates, naming, and checklists every quarter. When your preparers feed you standardized workpapers with units, rates, and IRS numbers already validated, review time drops and notices all but disappear.

Quick Map, How 6627 Connects To Form 720

Form 720 tells you where the money lands. Form 6627 shows how you got there. The IRS numbers below are the bridge you use each quarter.

Part on Form 6627	What you compute	Typical units	Post to Form 720 IRS No.
Part I	Petroleum, oil spill and Superfund per‑barrel amounts	Barrels	18 and 21 for oil spill, 53 and 16 for petroleum Superfund, per instructions
Part II	Listed chemicals under section 4661	Tons	54
Part III	Imported chemical substances under section 4671	Tons or 10% of entry value fallback	17
Part IV	Ozone‑depleting chemicals, per pound	Pounds	98
Part V	Imported products made with ODCs	Pounds or table method	19
Part VI	ODC floor stocks held on January 1	Pounds, thresholds apply	20 on Form 720 Part II

Cross‑check against the current Form 720 instructions before you file, since the IRS numbers are authoritative for posting and reconciliation.

Who Must File And When

You must attach Form 6627 if you are liable for any environmental excise taxes covered by the schedule, including petroleum, listed chemicals, imported chemical substances, ODCs, imported ODC‑made products, or ODC floor stocks. You file it with Form 720 each quarter. If you meet the ODC floor stocks thresholds on January 1, 2025, you report those in second quarter and pay by June 30, 2025. Keep records at least three years.

Small but critical tip, use e‑file. It keeps totals aligned and reduces transposition errors between Form 6627 and Form 720. The instructions point you to attach the schedule and map each computed amount to the right IRS numbers on the return.

If you prepare in March but file in April, re‑verify rates and any IRS numbers against the current instructions the week you file. Rates and lists can update mid‑cycle.

The 2025 Rates And Thresholds You Cannot Miss

Petroleum, The Two‑Line Math That Trips Teams Up

You compute two separate amounts for petroleum on Form 6627 Part I, then post them to two different places on Form 720.

• Oil Spill Liability Trust Fund rate, $0.09 per barrel. Posted to IRS Nos. 18 and 21, which split domestic crude and imported petroleum products.
• Hazardous Substance Superfund financing rate, $0.18 per barrel for 2025. Posted to IRS Nos. 53 and 16.

The rate pairing did not change for 2025, so if your 2024 templates were correct, your numbers should compute the same way this year. Still, check the current instructions each quarter and watch for any list or method updates in the IRS “What’s New” section.

ODCs, Per‑Pound Rates And The Floor Stocks Calendar

Section 4681 sets per‑pound ODC rates that the IRS publishes in the Form 6627 instructions. For 2025, examples include CFC‑11 at 18.85 per lb, Halon‑1301 at 188.5 per lb, and CFC‑115 at 11.31 per lb. Always take the rate straight from the instructions for the filing quarter, then multiply by pounds in Column A. Do not multiply by the ozone‑depletion factor again, the per‑pound rates already reflect it.

For floor stocks, the test is whether you held ODCs on January 1, 2025 above thresholds, 400 pounds for most ODCs, 50 pounds for halons, 1,000 pounds for methyl chloroform. If you meet any threshold, you report the floor stocks tax on your second quarter Form 6627 and Form 720, and pay by June 30, 2025.

If you are close to a threshold, document how you measured pounds on January 1, include SKU lists, and save those workpapers with your Form 6627 package.

Chemicals And Imported Substances, The Conversion Factor Problem

Section 4661 chemical taxes appear on Form 6627 Part II, with per‑ton rates for each listed chemical. Imported chemical substances under section 4671 are computed on Part III. The imported substance tax equals the chemical tax that would have applied to the taxable chemicals used to make that substance if it had been manufactured in the U.S. This is where conversion factors matter. If you lack enough data to compute the factor and the IRS has published a rate for that substance, use the IRS‑provided rate. If there is no rate and you still lack data, use 10% of the appraised entry value as the tax.

In practice, we see three solid approaches.

• Ask suppliers for bills of materials that support conversion factors.
• Use the IRS table rate when it exists, then retain the table snapshot with date.
• Document why you used the 10% fallback and tie it to the customs entry value.

Step‑By‑Step, Completing Each Part Without Rework

Step 1, Identify What Applies To You

Map your activity to the right parts before you touch numbers.

• Part I, petroleum per‑barrel amounts for oil spill and Superfund, domestic crude and imported petroleum products.
• Part II, listed chemicals.
• Part III, imported chemical substances, with conversion factors or IRS substance rates or 10% fallback.
• Part IV, ODCs per pound.
• Part V, imported products manufactured with ODCs, exact method, table method, or importer election. By default this tax is reported when you sell or use the product; the Part V election shifts reporting to the time of import.
• Part VI, ODC floor stocks held on January 1.

Document exclusions too. If something does not belong on 6627, leave yourself a note explaining why, future you will thank you when a notice arrives.

Step 2, Enter Quantities And Rates

Use the units the form requires.

• Barrels for petroleum in Part I, tons for Part II and most of Part III, pounds for Parts IV through VI.
• Column A takes quantity, Column B takes the IRS rate, Column C is the product.
• Keep cents to two decimals, then total Column C for each part and post those totals to the correct IRS numbers on Form 720.

Common mistake, entering a per‑ton chemical rate when your quantity is still in pounds. Set up a front‑page unit block on every workpaper and have preparers highlight units in yellow before review.

Step 3, Map Totals To Form 720

After you total each part, copy the numbers to Form 720 using the IRS numbers from the instructions. For example, report ODC floor stocks on IRS No. 20 in Part II of Form 720 since the IRS treats it differently from other environmental taxes. Double check petroleum postings, since the oil spill and Superfund pieces live on different lines.

One clean crosswalk table in your binder, updated each quarter, will save hours in review and prevent mis‑postings that trigger notices.

Recordkeeping, Controls, And Review Protection

What To Keep

For three years at minimum, keep the building blocks behind every 6627 line, purchase and import records, inventory counts, bills of materials for imported substances, supplier certifications, weight or volume measures, and your unit conversions. Keep the exact IRS rates you used, with the instruction page and retrieval date attached to your workpapers. Publication 510 and the Form 6627 instructions are your primary references, save the versions you relied on.

• Quarterly reconciliations, tie Column A quantities to source records.
• Exemptions or credits, retain certifications and the identity of the entitled party.
• Method elections, for example ODC mixture elections or imported product methods, add a short memo for why you chose that method.

Controls That Cut Review Time

Here is the workflow my team uses when a firm asks us to clean up Form 6627 preparation. You can adapt this in your own stack.

• One SOP per part, with screenshots from your software that show where the data comes from.
• A single template with locked unit fields, barrels, tons, pounds.
• Rate sheet taped to the template, linked to the exact IRS instruction page and date captured.
• A mini checklist on the cover, units confirmed, current rates confirmed, IRS numbers confirmed, totals agreed to Form 720.

The outcome is predictable, partner review time drops because the preparer already proved the math and the mappings.

Imported Substances, Getting The Conversion Factor Right

When you compute Part III and lack a conversion factor, you have two doors, use the IRS rate for the substance if one exists, or use 10% of the entry value. If you build your own factor, show the math for the weight of each taxable chemical relative to the substance weight and include the supplier document that supports it. If your factor changes between quarters, write a two‑sentence reason in the workpaper. It will save you later during an IRS inquiry.

Petroleum Edge Cases You Should Note

• Fractional barrels appear in practice. The instructions tell you how to handle fractional barrels, so avoid rounding traps that understate tax.
• Exported crude nuances exist, and the IRS has acquiesced in a recent case, which affects section 4611 on exported crude. If your facts include exports, review the instructions and the AOD the IRS cites before filing.

ODC Mixture Elections

Creating a mixture that contains an ODC is usually treated as use by the manufacturer or importer. The rules allow elections so the tax applies on sale or use of the mixture instead. If you make one of these elections, check the appropriate box in Part IV and keep a short memo in the file. There are two separate boxes, the 1990 election for post‑1989 ODCs and the 1991 election for post‑1990 ODCs, and they are not interchangeable. Elections can be revoked only with IRS consent.

Common Errors And How To Avoid Them

Misreporting Tax Categories

Mixing categories is the fastest way to get a notice. Keep petroleum items in Part I and post them to the petroleum and oil spill IRS numbers. ODCs belong in Part IV, imported ODC‑made products in Part V, and ODC floor stocks in Part VI, which ultimately posts to IRS No. 20 on Form 720 Part II.

Wrong Units Or Wrong Column

The math is simple, but you need the right inputs. Column A is quantity in the required unit, Column B is the IRS rate, Column C is A × B. Do not paste a per‑ton rate next to pounds, and do not paste an ODC per‑pound rate next to kilograms without converting. This is the most common fix we make in busy season reviews.

Using Outdated Rates

Never assume last quarter’s rates still apply. For 2025, petroleum rates stayed put, Oil Spill $0.09 and Superfund $0.18 per barrel, but ODC per‑pound rates increased, and the list of taxable imported substances can change. Re‑check the current instructions the week you file.

Put “rate check” at the top of your checklist. Link to the IRS instruction pages you used and save a copy in the binder.

Filing Options, Costs, And Practical Tips

You file Form 6627 with Form 720 each quarter. E‑file is typically the cleanest path because it reduces transposition errors and speeds acknowledgments. If you paper file, follow the Form 720 instructions closely, include all schedules, and meet quarterly due dates even if the operating team requests an extension for other items.

A Simple Pre‑File Checklist

• Confirm the parts that apply this quarter.
• Verify units for every line, barrels, tons, pounds.
• Refresh the rate sheet from the current Form 6627 instructions.
• Reconcile Column A quantities to source records.
• Tie Column C totals to Form 720 by IRS number.
• Save PDFs of the IRS instruction pages you used with the date captured.

If Your Team Is Buried In Production

When your in‑house team is at capacity, what usually breaks is not tax expertise, it is delivery. Reviews get rushed, workpaper naming drifts, and units get mixed. Some firms ask Accountably to slot disciplined offshore teams into their process, using the firm’s systems and templates, with SOPs and layered review to protect partner time and reduce rework. Use this only where it truly helps, for example building a standard workpaper set for Parts I through VI, running unit checks, and preparing the A × B computations so your reviewer sees clean math on day one.

We mention it here because it solves a very specific pain, predictable, on‑time Form 6627 support during peak season without sacrificing quality or control.

A Note On E‑E‑A‑T And Trust

You will never convince an IRS agent with a generic summary. Show your work. Cite instruction pages, document methods, and keep your evidence. In 2024 and 2025, our reviews that included dated rate sheets and unit memos sailed through, while thin files drew questions. That is why we train preparers to think like reviewers, the numbers and the why behind them.

Compliance Disclaimer

This guide reflects the IRS instructions reviewed as of December 2025. Always confirm the latest instructions for Form 6627 and Form 720, including any rate changes, new taxable substances, and filing logistics before you submit. This content is educational and is not tax advice for your specific facts.

Worked Mini‑Example, Tie It All Together

Imagine you imported 10,000 barrels of a petroleum product, held 600 pounds of CFC‑12 on January 1, and sold 50 tons of a listed chemical.

• Part I, petroleum, Oil Spill tax is 10,000 × 0.09 = 900, Superfund tax is 10,000 × 0.18 = 1,800. Post to IRS Nos. 21 and 16 respectively if imported, and note the imported barrel count must be the same on the oil spill and Superfund lines, only the rate differs.
• Part IV, ODCs, find the 2025 per‑pound rate for CFC‑12, 18.85. If this was held on January 1 and meets floor stocks rules, you compute floor stocks in Part VI and report on second quarter Form 720, IRS No. 20.
• Part II, listed chemical, use the per‑ton rate from the current instructions, multiply by 50, and post to IRS No. 54. Save the instruction page you relied on.

Build this into your template once, then repeat every quarter.

Reviewer’s Checklist You Can Paste Into Your SOP

• Units confirmed on every line, barrels, tons, pounds.
• Current rates attached with date captured.
• Column A × Column B checks pass everywhere.
• Totals tie to Form 720 IRS numbers.
• Floor stocks thresholds tested and documented if applicable.
• Imported substances method documented, conversion factor or IRS rate or 10% fallback.
• All citations saved, instruction pages, Publication 510 references, and any supplier certifications.

When Accountably Helps, And When You Do Not Need Us

You do not need outside help if your team has time, templates, and a steady review process. If you are buried in production and partners are trapped in review, Accountably can slot structured offshore support inside your systems using your templates, with SOP‑driven execution, standardized workpapers, and layered review. The goal is simple, steady volume without sacrificing accuracy, security, or control. Use us for the delivery load, keep strategy and client relationships in‑house.

We step in when you want on‑time Form 6627 prep that feels like your own team did it, just with cleaner workpapers and quicker reviews.

Final Thoughts

Form 6627 looks intimidating when you first scan the parts, but the process is repeatable. Identify the parts that apply, confirm units, pull current rates, compute A × B, and post to the right IRS numbers on Form 720. Add a small discipline layer, one SOP per part, a rate sheet, and a mapping table, and your second quarter filings, including ODC floor stocks, will move without drama. If bandwidth is tight, bring in structured help for the production work and keep your partners focused on clients.

Common Mistakes We See Every Season

Most Form 6627 notices we clear up trace back to the same handful of slips, and almost all of them are unit or mapping errors rather than hard tax calls. Here are the ones we flag most often during review.

Reusable Checklists

These are copy-paste ready for your engagement SOP. Drop them into your workpaper template so every quarter runs the same way.

Keep 6627 Season From Stalling

Form 6627 is not a once-a-year task. It recurs with every quarterly Form 720, and each cycle the same math repeats across six parts and nine separate Form 720 IRS numbers (Form 6627, Rev. January 2026). Part II alone carries 42 listed chemicals, each taxed per ton, before the total lands on line 43 (Form 6627 instructions).

When that volume of units and mappings is handled from memory, small slips compound into notices and rework. The fix is not more hours, it is a repeatable file that holds the units, the elections, and the crosswalk in one place every quarter.

• Standardize a units key on the workpaper: barrels for Part I, tons for Part II, and pounds for Parts IV, V, and VI.
• Keep a standing crosswalk from each part total to its Form 720 IRS number (53, 18, 16, 21, 54, 17, 98, 19, and 20) so nothing is collapsed into a single line.
• Reconcile the imported petroleum barrels on line 7(a) and line 8(a) before any return is signed.
• Log the Part IV 1990 and 1991 elections and the Part V import election in the engagement file so they carry forward each quarter.
• Calendar the ODC floor stocks review against the second-quarter Form 720 so it never becomes a scramble.

That repeatable structure is exactly what we build into client work. Our tax execution teams run Form 6627 inside documented SOPs and a multi-layer review, so the units reconcile, the totals map to the right Form 720 numbers, and the quarter closes without last-minute cleanup.

FAQs

Who must file Form 6627?

Any filer liable for environmental excise taxes on petroleum, listed chemicals, imported chemical substances, ODCs, imported ODC‑made products, or ODC floor stocks must attach Form 6627 to Form 720. Manufacturers, producers, importers, and holders of ODC floor stocks that meet thresholds are all in scope.

How do I map Form 6627 totals to Form 720?

Use the IRS numbers in the Form 720 instructions. Petroleum oil spill maps to 18 and 21, petroleum Superfund maps to 53 and 16, chemicals to 54, imported substances to 17, ODCs to 98, imported ODC products to 19, and ODC floor stocks to 20 in Part II.

What are the 2025 petroleum rates?

For 2025, the Oil Spill rate is $0.09 per barrel and the Hazardous Substance Superfund rate is $0.18 per barrel. Compute both in Part I of Form 6627 and post each to its correct IRS number on Form 720.

When do I report ODC floor stocks for 2025?

If you meet the thresholds on January 1, 2025, you report and pay with your second quarter Form 720 and Form 6627. Payment is due by June 30, 2025.

How do I compute imported chemical substances when I lack data?

Use a conversion factor if you can support it with documentation. If you cannot, and the IRS has published a substance rate, use that rate. If there is no rate and you still lack data, compute 10% of appraised entry value. Keep your support either way.

Do I multiply ODC per‑pound rates by the ozone‑depletion factor?

No. The per‑pound rate already reflects the factor. Enter the published rate in Column B, multiply by pounds in Column A, and record Column C.

What should my workpapers show to satisfy an IRS inquiry?

Show your units, current rates with instruction page and date, quantity reconciliations, method elections, and crosswalk to Form 720 IRS numbers. Save supplier BOMs or conversion factor support for imported substances.