2003 Tax Help Archives  
  Home > Tax Help Archives > 2003 > Instructions > Form 720
Instructions for Form 720 2003 Tax Year

General Instructions

This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Changes To Note

  • The tax on sales of luxury passenger vehicles
    (IRS No. 92) has expired. However, the tax continues to apply to payments taxpayers receive for long-term leases entered into before January 1, 2003. See Luxury Tax on page 5.
  • New Form 720-V, Payment Voucher, must be included with your return and payment if you have a balance due on line 10 of Form 720. Do not use the voucher to make deposits. If you received Package 720, Form 720-V is located on the inside of the back cover. If you order Form 720 from the IRS or download it from the IRS website, the voucher is included with Form 720.
  • The preprinted label is no longer included with Package 720. The first copy of Form 720 in the package and Form 720-V have been printed with the name, address, EIN, and quarter ending date.

Purpose of Form

Use Form 720 and attachments to report liability by IRS No. and pay the excise taxes listed on the form.

When To File

You must file a return for each quarter of the calendar year as follows:

Quarter covered Due by
Jan., Feb., Mar. April 30
Apr., May, June July 31
July, Aug., Sept. October 31
Oct., Nov., Dec. January 31

If any due date for filing a return falls on a Saturday, Sunday, or legal holiday, you may file the return on the next business day.

Send your return to the IRS using the U.S. Postal Service or a designated private delivery service to meet the “timely mailing as timely filing/paying” rule. See Private Delivery Services on page 2.

Floor stocks tax.   Report the floor stocks tax on ozone-depleting chemicals (ODCs), IRS No. 20, on the return due by July 31 of each year. The tax payment is due by June 30. See page 6.

Where To File

Send Form 720 to the Internal Revenue Service Center, Cincinnati, OH 45999-0009.

How To File

If you are not reporting a tax that you normally report, enter a zero on the appropriate line in Part I or II (Form 720). Also, if you have no tax to report, write “None” on line 3, Part III; sign and date the return.

If you have adjustments to liabilities reported for prior quarters, see Form 720X, Amended Quarterly Federal Excise Tax Return. Do not enter adjustments on
Form 720.

If you attach additional sheets, write your name and EIN on each sheet.

One-Time Filing

If you import a gas guzzling automobile, you may be eligible to make a one-time filing of Form 720 and Form 6197, Gas Guzzler Tax, if you meet all of the following conditions:

  • You do not import gas guzzling automobiles in the course of your trade or business and
  • You are not required to file Form 720 reporting excise taxes for the calendar quarter, except for a one-time filing.

To make a one-time filing:

  1. File the return for the quarter in which you incur liability for the tax. See When To File above.
  2. Pay the tax with the return. No deposits are required.
  3. If you are an individual and do not have an employer identification number (EIN), enter your social security number (SSN) or individual taxpayer identification number (ITIN) on Form 720 in the space for the EIN.
  4. Check the one-time filing box above Part I of
    Form 720.

Final Return

File a final return if you have been filing Form 720 and you:

  1. Go out of business or
  2. Will not owe excise taxes that are reportable on Form 720 in future quarters.

Tip

If you are only filing to report zero tax and you will not owe excise tax in future quarters, check the final return box above Part I of Form 720. The IRS will then stop sending Package 720 to you each quarter.

Recordkeeping

Keep copies of your tax return, records, and accounts of all transactions to show that the correct tax has been paid. Keep records to support all claims and all exemptions at least 4 years from the latest of the date:

  • The tax became due,
  • You paid the tax, or
  • You filed a claim.

Penalties and Interest

Avoid penalties and interest by filing returns and depositing and paying taxes when due. The law provides penalties for filing a return late; depositing taxes late; paying taxes late; willfully failing to collect and pay tax or file a return; negligence; and fraud. These penalties are in addition to the interest charge on late payments. The penalty for filing a return late will not be imposed if you can show that the failure to file a timely return is due to reasonable cause. Those filing after the due date must attach an explanation to the return to show reasonable cause.

Trust fund recovery penalty.   If communications and air transportation (trust fund) taxes are collected but not paid to the United States Treasury or are willfully not collected, the trust fund recovery penalty may apply. The penalty is the full amount of the unpaid trust fund tax.

  The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so.

  A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an employee of a sole proprietorship, an accountant, or a volunteer director/trustee. A responsible person may also include one who signs checks for the business or otherwise has authority to cause the spending of business funds.

  Willfully means voluntarily, consciously, and intentionally. A responsible person acts willfully if he or she knows the required actions are not taking place.

Additional Information

You may find the following publications helpful when preparing Form 720 and any attachments:

  • Pub. 510, Excise Taxes for 2003, contains definitions and examples that will help you prepare Form 720.
  • Pub. 378, Fuel Tax Credits and Refunds, has information on nontaxable uses of fuels.
  • Pub. 509, Tax Calendars for 2003, has deposit and payment due dates for all Federal excise taxes.

Private Delivery Services

You can use certain private delivery services designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns and payments. The most recent list of designated private delivery services was published by the IRS in September 2002. The list includes only the following:

  • Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service.
  • DHL Worldwide Express (DHL): DHL “Same Day” Service and DHL USA Overnight.
  • Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First.
  • United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

The private delivery service can tell you how to get written proof of the mailing date.

Caution

Private delivery services cannot deliver items to P.O. boxes. You must use the U.S. Postal Service to mail any item to an IRS P.O. box address.

Unresolved Tax Issues

If you have attempted to deal with an IRS problem unsuccessfully, you should contact the Taxpayer Advocate. The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels.

While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.

Your assigned personal advocate will listen to your point of view and will work with you to address your concerns. You can expect the advocate to provide you with:

  • A "fresh look" at your new or on-going problem.
  • Timely acknowledgment.
  • The name and phone number of the individual assigned to your case.
  • Updates on progress.
  • Timeframes for action.
  • Speedy resolution.
  • Courteous service.

When contacting the Taxpayer Advocate, you should provide the following information:

  • Your name, address, and taxpayer identification number.
  • The name and telephone number of an authorized contact person and the hours he or she can be reached.
  • The type of tax return and year(s) or period(s) (for quarterly returns) involved.
  • A detailed description of the problem.
  • Previous attempts to solve the problem and the office you contacted.
  • A description of the hardship you are facing (if applicable).

You may contact a Taxpayer Advocate by calling a toll-free number, 1-877-777-4778. Persons who have access to TTY/TDD equipment may call 1-800-829-4059 and ask for Taxpayer Advocate assistance. If you prefer, you may call, write, or fax the Taxpayer Advocate office in your area. See Pub. 1546, The Taxpayer Advocate Service of the IRS, for a list of addresses and fax numbers.

Photographs of Missing Children

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

First | Next

Instructions Index | 2003 Tax Help Archives | Tax Help Archives | Home