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IRS Form 720 is an excise tax return, more commonly referred to as the Federal Excise Tax Return on a quarterly basis. This return is supposed to be filed by any business involved in certain goods or services activities, or activities subject to excise taxes. Fuel, air transportation, health, indoor tanning, and environmental taxes have most of their profit revenues linked to these taxes. In fact, all excise taxes collected are meant to support federal programs, infrastructure, and public goods.

Not every business is expected to file this form. Most of the entities required to file include insurance providers, airlines, manufacturers, truck fleets, and companies that sell products like fuels and tires in terms of taxability. Furthermore, certain employers offering self-insured health plan benefits may need to file claims for the PCORI fee. Identifying which category your business falls under is key to determining your filing responsibility.

On a quarterly basis, Form 720 is to be filed, and the filing deadlines are on the last day of the month following each quarter. For the first quarter, for instance, January to March returns should be filed by April 30. This is the way one could avoid penalties and interest charges from the IRS. The filing could either be done online or the traditional way of paper filing, although filing electronically is faster, more precise, and most convenient for tax professionals and business owners.

Excise tax regulations are complex for many, but filing Form 720 can easily be simplified by utilizing good tax compliance software, e-filing providers, and IRS-approved sites. Keeping up to date with all deadlines, tax categories, and documents needed prevents big mistakes while keeping the process streamlined. Using IRS-approved e-file solutions ensures compliance with fewer errors and reduced hassle.