What Is IRS Form 720? - TurboTax Tax Tips & Videos - Intuit 2026

Definition & Purpose of IRS Form 720

IRS Form 720, titled the Quarterly Federal Excise Tax Return, is a document used by businesses operating in the United States to report and pay federal excise taxes on specific goods and services. These taxes may include environmental taxes, fuel taxes, and other excise taxes imposed on activities such as air transportation and indoor tanning services. The form is crucial for ensuring compliance with federal taxation laws, facilitating appropriate tax collection for various sectors of the economy.

Overview of Excise Taxes

• Environmental Taxes: Levied on products and activities that affect the environment, such as those contributing to ozone depletion.
• Fuel Taxes: Applicable to manufacturers, producers, and importers of fuels like gasoline and diesel.
• Communication Services: Taxes on local and long-distance phone services.

Steps to Complete IRS Form 720

Completing IRS Form 720 involves a methodical approach to ensure all applicable taxes are accurately reported. Here is a step-by-step guide:

1. Identify Applicable Taxes: Determine which specific excise taxes apply to your business activities.
2. Gather Required Information: Collect all necessary details, including taxable activities and amounts.
3. Fill Out Part I and II:
   • Part I for specific taxes such as fuel taxes.
   • Part II might include manufacturer's taxes, among others.
4. Calculate Total Taxes Owed: Sum the amounts from all applicable sections.
5. Complete Schedules and Attachments: If required, attach schedules showing detailed calculations.
6. Review for Accuracy: Double-check all entries for accuracy and completeness.
7. Sign and Date the Form: Ensure the form is duly signed by an authorized representative.

Important Tools for Completion

• Tax Software Compatibility: Forms can be accurately completed using tax filing software like TurboTax.
• Professional Assistance: Seeking help from a tax professional can mitigate risks of errors.

Submission Methods

Multiple submission options exist to cater to various preferences and ensure convenience:

• Online Submission: Electronic filing through the IRS e-file system or authorized software.
• Mail Submission: Paper forms can be mailed to the designated IRS office.
• In-Person Submission: Some taxpayers opt for direct submission at IRS offices.

Advantages of Electronic Filing

• Faster processing times.
• Immediate acknowledgment of receipt.
• Reduced risk of errors.

Who Issues the Form & Why It Matters

The Internal Revenue Service (IRS), a bureau of the Department of the Treasury, is responsible for issuing Form 720. The IRS collects revenue essential for funding federal operations and ensures compliance with tax laws. This form provides the government with crucial insights into taxable business activities across different industries.

Mitigating Risks

• Ensure all sections are accurately completed.
• Keep detailed records of all taxable activities and communications with the IRS.

Real-World Examples

• An airline reports taxes on domestic passenger ticket sales.
• A tire manufacturer files for federal excise taxes on tires produced and sold.