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Form 720 is a quarterly form and there are cutoff dates for each period:

If you miss the deadline for filing Form 720, your business may suffer from the consequences equally serious to the missing tax payments. Here is what you need to know:

1) Penalties

By not submitting Form 720 on time, you will be subject to form 720 penalties from the IRS. The IRS imposes penalties for late filings as explained in Section 6651(a) of the Internal Revenue Code. The penalty may reach up to 5% of the tax due for each month with arrears, thus up to a 25% maximum. A penalty may be levied for not filing, even if no taxes are due.

2) Additional Interest Charges

Besides penalties, the IRS will also charge you interest on any unpaid taxes and penalties. Interest starts to accrue from the original due date and runs until the account is fully settled. The IRS adjusts the interest rate every quarter, so to prevent getting into a spiral of growing expenses, it is better to avoid late filings.

3) Exclusive Penalties for Certain Tax Categories

Some excise taxes are subjected to a higher degree of penalty. As an illustration, if the buyers' taxes on communications, air transport, or indoor tanning services are not remitted by the sellers to the U. S. Treasury, the IRS has the authority to penalize the unpaid tax by the entire amount of the tax. 

This kind of penalty can be imposed on those persons who handled the tax payment, e. g. , the business officers, partners, or employees with signing authority. Such persons may be confronted with the Trust Fund Recovery Penalty (TFRP), which means that they can be made personally liable for the tax amount not paid.

4) Audits

Unpaid or delayed payments might lead the IRS to conduct an audit. Audits, being lengthy and expensive, may also result in the imposition of additional penalties. If you would like to circumvent the troubles of an audit, you are advised to keep a close watch on your Form 720 submission and payment schedules.

5) Losing Reputation

If you are not on top of your tax submissions, you are risking the image of your business. A failure to meet tax deadline after deadline could make your clients, partners, and investors doubt your trustworthiness and sense of responsibility, which in turn will limit your chances of getting new business. By being careful and filing your taxes on time, you can keep the charm of your business.

6) Missing Specific Tax Deductions

Sometimes, a business may be eligible for some tax deductions whose availability is limited to a certain period only. By not filing on time, you will certainly miss out on the opportunity to use those deductions for that particular quarter. Through filing on time, you will always have a chance to save more.

You should attend to the negative consequences caused by the failure to file your Form 720 by not missing a deadline. To guarantee safety and accuracy, only choose the electronic way to file your return. 

Using  QuickFile720, an IRS Authorized 720 efiling portal, can substantially help a business to file on time and therefore stay away from paying any fines.

Conclusion

Filing Form 720 on time is crucial to avoid penalties, interest charges, and other serious consequences. Staying compliant not only protects your business from financial setbacks but also helps maintain a positive reputation. Use QuickFile720, an IRS-Authorized platform, to ensure timely and hassle-free filings.