Instructions For Form 720 - Quarterly Federal Excise Tax Return

Communication and Air Transportation Taxes—

You are not authorizing the designee to receive any

refund check, bind you to anything (including additional

Uncollected Tax Report

tax liability), or otherwise represent you before the IRS. If

A separate report is required to be filed by collecting

you want to expand the designee’s authority, see

agents of communications services and air transportation

Publication 947, Practice Before the IRS and Power of

taxes if the person from whom the facilities or services

Attorney.

tax (the tax) is required to be collected (the taxpayer)

The authorization will automatically expire one year

refuses to pay the tax, or it is impossible for the collecting

from the due date (without regard to extensions) for filing

agent to collect the tax. The report must contain the

your Form 720. If you or your designee want to revoke

following information: the name and address of the

this authorization, send a written statement of revocation

taxpayer, the type of facility provided or service rendered,

to the Internal Revenue Service Center, Cincinnati,

the amount paid for the facility or service (the amount on

OH 45999. See Publication 947 for more information.

which the tax is based), and the date paid.

Regular method taxpayers. For regular method

Part I

taxpayers, the report must be filed by the due date of the

Form 720 on which the tax would have been reported.

Environmental Taxes

Alternative method taxpayers. For alternative method

Use Form 6627, Environmental Taxes, to figure the

taxpayers, the report must be filed by the due date of the

environmental taxes on:

Form 720 that includes an adjustment to the separate

•

Oil spill liability, IRS Nos. 18 and 21;

account for the uncollected tax. See Alternative method

•

Ozone-depleting chemicals (ODCs), IRS No. 98;

on page 8.

•

Imported products that used ODCs as materials in the

Where to file. Do not file the uncollected tax report

manufacture or production of the product, IRS No. 19;

with Form 720. Instead, mail the report to:

and

•

The floor stocks tax on ODCs, IRS No. 20.

Internal Revenue Service

Attach Form 6627 to Form 720. The tax rates for

Collected Excise Tax Coordinator

these taxes are shown on Form 6627.

S:C:CP:RC:Ex

1111 Constitution Avenue NW, IR-2016

Communications and Air Transportation

Washington, DC 20224

Taxes

Fuel Taxes

Who Must File

First taxpayer’s report. If you are reporting gallons of

The person receiving the payment for communications or

taxable fuel that may again be subject to tax, you may

air transportation services must collect and pay over the

need to file a first taxpayer’s report. The report must

tax and file the return. Enter the amount of tax collected

contain all the information as shown in the Model

or considered collected for the quarter.

Certificate B in the Appendix of Publication 510.

Communications Services (IRS No. 22)

The person who paid the first tax must:

•

Give a copy of the first taxpayer’s report to the buyer;

The tax is 3% of amounts paid for local telephone

•

File the first taxpayer’s report with Form 720 for the

service, toll telephone service, and teletypewriter

quarter for which the report relates; and

exchange service.

•

Write “EXCISE — FIRST TAXPAYER’S REPORT”

Transportation of Persons by Air (IRS No. 26)

across the top of a separate copy of the report, and by

The tax on transportation of persons by air is made up of

the due date of Form 720, send the copy to: Internal

the percentage tax and the domestic segment tax. Add

Revenue Service Center, Cincinnati, OH 45999-0555.

the percentage tax and the domestic segment tax to get

Diesel fuel (IRS No. 60). If you are liable for the diesel

the total tax on transportation of persons by air.

fuel tax on removal at the terminal rack, report these

Percentage tax. The percentage tax is 7.5% for

gallons on line 60(a). If you are liable for the diesel fuel

amounts paid for taxable transportation of persons by air.

tax on events other than removal at the terminal rack,

report these gallons on line 60(b). If you are liable for the

Domestic segment tax. For amounts paid for each

diesel fuel tax because you have produced diesel fuel by

domestic segment of taxable transportation of persons by

blending biodiesel with taxed diesel fuel outside of the

air, the domestic segment tax is $3.30 per segment for

bulk transfer/terminal system, report these gallons of

transportation that begins in 2006.

biodiesel on line 60(c). If you report gallons on line 60(c),

Rural airports. If a segment is to or from a rural

do not report those gallons on line 60(b).

airport, the domestic segment tax does not apply.

Multiply the total number of gallons subject to tax on

Transportation of Property by Air (IRS No. 28)

lines (a), (b), and (c) by $.244 and make one entry in the

The tax is 6.25% of amounts paid for transportation of

tax column.

property by air.

Also see Schedule T, Two-Party Exchange Information

Reporting on page 9 if applicable.

Use of International Air Travel Facilities

(IRS No. 27)

Diesel-water fuel emulsion (IRS No. 104). If you are

liable for the reduced rate (see below) of tax on a

For amounts paid during 2006, the tax on international

diesel-water fuel emulsion removal at the terminal rack or

flights is:

•

other taxable event, report these gallons on the line for

$14.50 per person for flights that begin or end in the

IRS No. 104.

United States or

•

$7.30 per person for domestic segments that begin or

Requirements. All of the following requirements must

end in Alaska or Hawaii (applies only to departures).

be met to be eligible for the reduced rate: (a) the

-3-

Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2006 Page 3

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