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Also known as the Quarterly Federal Excise Tax Return, Form 720 is an IRS filing for any business dealing with the products or services on which excise taxes are levied. These may include fields like transportation, fuel, environmental services, telecommunications, and insurance. Hence, it is essential to know if your company falls under this category to maintain tax compliance and save yourself from any penalties. 

Form 720 may apply to you should you be manufacturing, selling, or in services that are federally taxed. Some examples are gasoline distributors, indoor tanning services, air passenger transportation, and the manufacture of medical devices. Even companies impacted by the environmental excise or highway-related taxes must determine their respective filing requirements. Knowing these categories helps you to stay compliant with IRS regulations. 

Here’s a quick guideline to find out if your business might need to file:

Do you sell fuel and petroleum products?

Do you do air transportation services-related work with passenger tickets?

Do you provide insurance services on which excise taxes are charged?

Does your business deal with environmental excise taxes or chemicals?

If the answer to any of these is affirmative, you are most probably required to submit Form 720 quarterly. Ensure detailed logs of fuel sales, insurance transactions, or passenger tickets.

Form 720 must be filed four times a year, and not doing so will incur penalties. Many companies today have chosen e-filing for faster processing, accuracy, and instant confirmations. Being proactive in filing your returns will go a long way to maintaining compliance as well as establishing a strong financial foundation for your business operations.