Instructions For Form 720 - Quarterly Federal Excise Tax Return

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

Employer Identification Number (EIN)

or considered collected for the quarter.

If the EIN on the preaddressed Form 720 is wrong or you

Communications Services (IRS No. 22)

did not receive a preaddressed Form 720, enter the

correct number. If you are a one-time filer, you may not

The tax is 3% of amounts paid for local telephone

need an EIN. See Gas guzzler tax on page 6. If you do

service, toll telephone service, and teletypewriter

not have an EIN, you may apply for one online. Go to the

exchange service.

IRS website at and click

Transportation of Persons by Air (IRS No. 26)

on the “Employer ID Numbers (EINs)” link. You may also

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

apply for an EIN by calling 1-800-829-4933 (hours of

the percentage tax and the domestic segment tax. Add

operation are Monday - Friday, 8:00 a.m. to 8:00 p.m.

the percentage tax and the domestic segment tax to

local time), or you can fax or mail Form SS-4, Application

get the total tax on transportation of persons by air.

for Employer Identification Number, to the IRS.

Percentage tax. The percentage tax is 7.5% for

Signature

amounts paid for taxable transportation of persons by air.

Form 720 must be signed by a person authorized by the

Domestic segment tax. For amounts paid for each

entity to sign this return.

domestic segment of taxable transportation of persons by

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

Third Party Designee

transportation that begins in 2006.

If you want to allow an employee of your business, a

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

return preparer, or other third party to discuss your

airport, the domestic segment tax does not apply.

Form 720 with the IRS, check the “Yes” box in the Third

Transportation of Property by Air (IRS No. 28)

Party Designee section of Form 720. Also, enter the

The tax is 6.25% of amounts paid for transportation of

designee’s name, phone number, and any five digits that

property by air.

person chooses as his or her personal identification

number (PIN).

Use of International Air Travel Facilities

By checking the “Yes” box, you are authorizing the

(IRS No. 27)

IRS to call the designee to answer any questions relating

For amounts paid during 2006, the tax on international

to the processing of or the information reported on Form

flights is:

•

720. You are also authorizing the designee to:

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

•

Exchange information concerning Form 720 with the

United States or

IRS and

•

$7.30 per person for domestic segments that begin or

•

Respond to certain IRS notices that you have shared

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

with your designee relating to Form 720. The IRS will not

Communication and Air Transportation Taxes—

send notices to your designee.

Uncollected Tax Report

You are not authorizing the designee to receive any

refund check, bind you to anything (including additional

A separate report is required to be filed by collecting

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

agents of communications services and air transportation

you want to expand the designee’s authority, see

taxes if the person from whom the facilities or services

Publication 947, Practice Before the IRS and Power of

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

Attorney.

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

agent to collect the tax. The report must contain the

The authorization will automatically expire one year

following information: the name and address of the

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

taxpayer, the type of facility provided or service rendered,

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

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

this authorization, send a written statement of revocation

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

to the Internal Revenue Service Center, Cincinnati,

OH 45999. See Publication 947 for more information.

Regular method taxpayers. For regular method

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

Part I

Form 720 on which the tax would have been reported.

Alternative method taxpayers. For alternative method

Environmental Taxes

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

Form 720 that includes an adjustment to the separate

Use Form 6627, Environmental Taxes, to figure the

account for the uncollected tax. See Alternative method

environmental taxes on:

•

on page 8.

ODCs, IRS No. 98;

•

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

Collected Excise Tax Coordinator

Attach Form 6627 to Form 720. The tax rates for

S:C:CP:RC:Ex

these taxes are shown on Form 6627.

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

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

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