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Instructions for Form 720 (Rev. January 2016)

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Instructions for Form 720 (Rev. January 2016) Userid: CPM Schema: Leadpct: 100% Pt. size: 9.5 Draft Ok to Print instrx AH XSL/XML Fileid: … ons/I720/201601/A/XML/Cycle03/source (Init. & Date) _______ Page 1 of 22 16:37 - 18-Feb-2016 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Department of the Treasury Instructions for Form 720 Internal Revenue Service (Rev. January 2016) Quarterly Federal Excise Tax Return Section references are to the Internal Revenue Code unless Arrow shafts (IRS No. 106). For calendar year 2016, the otherwise noted. tax on arrow shafts continues to be $.49 per arrow shaft. Future Developments Reducing your excise tax liability, For federal income tax For the latest information about developments related to purposes, reduce your section 4081 excise tax liability by the Form 720 and its instructions, such as legislation enacted amount of excise tax credit allowable under section 6426(c) after they were published, go to www.irs.gov/form720. and your section 4041 excise tax liability by the amount of your excise tax credit allowable under section 6426(d), in What's New determining your deduction for those excise taxes or your cost of goods sold deduction attributable to those excise Suspension of section 4191 medical device tax (former­ taxes. ly IRS No. 136). The medical device tax no longer applies to sales for two years beginning January 1, 2016, through Inland waterways fuel use tax (IRS No. 64) increase. December 31, 2017. For information on the tax for sales The rate increased to $.29 per gallon for fuel used after before January 1, 2016, see T.D. 9604 and Notice 2012-77. March 31, 2015. See Inland waterways fuel use tax (IRS No. 64), later. Alternative liquid fuel and compressed natural gas (CNG) gasoline gallon equivalent (GGE) and diesel gal­ Exported gasoline blendstocks. Claims for exported lon equivalent (DGE). For sales or uses of fuel after gasoline blendstocks taxed at $.001 per gallon are made on December 31, 2015, for taxation under section 4041, Schedule C, line 15b. Continue to use line 1b to make claims liquefied petroleum gas (LPG) has a GGE of 5.75 pounds or for exported gasoline blendstocks taxed at $.184 per gallon. 1.353 gallons of LPG, liquefied natural gas (LNG) has a DGE Electronic filing. You can electronically file Form 720 of 6.06 pounds or 1.71 gallons of LNG, and CNG has a GGE through any electronic return originator (ERO), transmitter, of 5.66 pounds or 123.57 cubic feet of CNG. See Alternative and/or intermediate service provider (ISP) participating in the fuel (IRS Nos. 112, 118, and 120–124), and Line 6. IRS e-file program for excise taxes. For more information on Nontaxable Use of Alternative Fuel, later. e-file, visit the IRS website at www.irs.gov/efile. Biodiesel, renewable diesel mixture, alternative fuel, Federal tax deposits made by electronic funds transfer. and alternative fuel mixture credits. The section 6426 Generally, you must use electronic funds transfer to make credits and section 6427 payments for biodiesel, renewable federal tax deposits, such as deposits of employment tax, diesel mixtures, alternative fuel, and alternative fuel mixtures excise tax, (for exceptions, see Payment of Taxes, later), and are extended retroactively to January 1, 2015, and through corporate income tax. Generally, electronic funds transfers 2016. See Schedule C. Claims, later. are made using the Electronic Federal Tax Payment System Alternative liquid fuel GGE and DGE claim rates. For (EFTPS). If you do not want to use EFTPS, you can arrange sales or uses of fuel after December 31, 2015, LPG has a for your tax professional, financial institution, payroll service, claim rate (or GGE) of 5.75 pounds or 1.353 gallons of LPG; or other trusted third party to make deposits on your behalf. LNG has a claim rate (or DGE) of 6.06 pounds or 1.71 EFTPS is a free service provided by the Department of gallons of LNG. Treasury. To get more information about EFTPS or to enroll in Use of international air travel facilities (IRS No. 27). For EFTPS, visit www.eftps.gov or call 1-800-555-4477. Also see calendar year 2016, the tax on the amount paid for Pub. 966, Electronic Federal Tax Payment System, A Guide international flights is $17.80 per person for flights that begin to Getting Started. or end in the United States. The tax continues to be $8.90 per person for domestic segments that begin or end in Alaska or Hawaii (applies only General Instructions to departures). See Air Transportation Taxes, later. Purpose of Form Section 4371(3) tax on foreign reinsurance premiums Use Form 720 and attachments to report your liability by IRS no longer applies. The 1% tax no longer applies to No. and pay the excise taxes listed on the form. If you report premiums paid on a policy of reinsurance issued by one a liability on Part I or Part II, you may be eligible to use foreign reinsurer to another foreign insurer or reinsurer, under Schedule C to claim a credit. the situations described in Rev. Rul. 2008-15. See Foreign Insurance Taxes, later. Who Must File Reminders See Patient-centered outcomes research fee (IRS Transportation of persons by air (IRS No. 26). For ! No. 133) in Part II for special rules about who must calendar year 2016, the tax on the amount paid for each CAUTION file to report the patient-centered outcomes research domestic segment of taxable air transportation continues to fee. be $4.00. You must file Form 720 if: Feb 18, 2016 Cat. No. 64240C Page 2 of 22 Fileid: … ons/I720/201601/A/XML/Cycle03/source 16:37 - 18-Feb-2016 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. You were liable for, or responsible for collecting, any of the Recordkeeping federal excise taxes listed on Form 720, Parts I and II, for a prior quarter and you have not filed a final return; or Keep copies of your tax return, records, and accounts of all You are liable for, or responsible for collecting, any of the transactions to show that the correct tax has been paid. Keep federal excise taxes listed on Form 720, Parts I and II, for the records to support all claims and all exemptions at least 4 current quarter. years from the latest of the date: See How To File for more information. The tax became due, You paid the tax, or When To File You filed a claim. You must file a return for each quarter of the calendar year as Penalties and Interest follows: If you receive a notice about a penalty after you file this return, reply to the notice with an explanation and we will Quarter covered Due by determine if you meet reasonable-cause criteria. Do not include an explanation when you file your return. Jan., Feb., Mar. April 30 Apr., May, June July 31 Trust fund recovery penalty. If communications, air transportation, and indoor tanning services taxes are July, Aug., Sept. October 31 collected but not paid to the United States Treasury or are Oct., Nov., Dec. January 31 willfully not collected, the trust fund recovery penalty may apply. The penalty is the full amount of the unpaid tax. The trust fund recovery penalty may be imposed on all If any due date for filing a return falls on a Saturday, persons who are determined by the IRS to be responsible for Sunday, or legal holiday, you may file the return on the next collecting, accounting for, and paying over these taxes, and business day. who acted willfully in not doing so. Send your return to the IRS using the U.S. Postal Service A responsible person can be an officer or employee of a or a designated private delivery service to meet the “timely corporation, a partner or employee of a partnership, an mailing as timely filing/paying” rule. See Private Delivery employee of a sole proprietorship, an accountant, or a Services, later. volunteer director/trustee. A responsible person may also include one who signs checks for the business or otherwise Floor stocks tax. Report the floor stocks tax on has authority to cause the spending of business funds. ozone-depleting chemicals (ODCs), IRS No. 20, on the return due by July 31 of each year. The tax payment is due Willfully means voluntarily, consciously, and intentionally. by June 30. See Floor Stocks Tax, later. A responsible person acts willfully if he or she knows the required actions are not taking place. Where To File Send Form 720 to: Additional Information You may find the following products helpful when preparing Department of the Treasury Form 720 and any attachments. Internal Revenue Service Pub. 510, Excise Taxes, contains definitions and Cincinnati, OH 45999-0009 examples that will help you prepare Form 720. Pub. 510 also contains information on fuel tax credits and refunds. Pub. 509, Tax Calendars, has deposit and payment due How To File dates for federal excise taxes listed in this publication. If you are not reporting a tax that you normally report, enter a Notice 2005-4 (fuel tax guidance), see 2005-2 I.R.B. 289, zero on the appropriate line on Form 720, Part I or II. Also, if available at www.irs.gov/irb/2005-02_IRB/ar14.html. you have no tax to report, write “None” on Form 720, Part III, Notice 2005-24 (sales of gasoline on oil company credit line 3; sign and date the return.
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