Instructions For Form 720 - Quarterly Federal Excise Tax Return

Collectors using the alternative method for deposits.

Signature

Collectors using the alternative method for deposits must

Form 720 must be signed by a person authorized by the

adjust their separate accounts for the credit or refund. For

entity to sign this return.

more information, see Alternative method on page 8.

Third Party Designee

Form 720 taxpayers. Credits or refunds for nontaxable

service that was billed after February 28, 2003, and before

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

August 1, 2006, can be requested by taxpayers only on their

preparer, or other third party to discuss your Form 720 with

2006 federal income tax returns. Instructions to request the

the IRS, check the “Yes” box in the Third Party Designee

credit or refund are available with the 2006 income tax

section of Form 720. Also, enter the designee’s name,

returns. Do not use Form 8849, Form 720, or Form 843 to

phone number, and any five digits that person chooses as

make claims for nontaxable service; the IRS will not process

his or her personal identification number (PIN).

these claims.

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

speak with the designee to answer any questions relating to

Air Transportation Taxes

the processing of or the information reported on

Form 720. You are also authorizing the designee to:

Who Must File

•

Exchange information concerning Form 720 with the IRS,

The person receiving the payment for air transportation

and

•

services must collect and pay over the tax and file the

Respond to certain IRS notices that you have shared with

return. Enter the amount of tax collected or considered

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

collected for the quarter.

notices to your designee.

You are not authorizing the designee to receive any

Transportation of Persons by Air (IRS No. 26)

refund check, bind you to anything (including additional tax

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

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

percentage tax and the domestic segment tax. Add the

want to expand the designee’s authority, see Publication

percentage tax and the domestic segment tax to get the

947, Practice Before the IRS and Power of Attorney.

total tax on transportation of persons by air.

The authorization will automatically expire 1 year from the

due date (without regard to extensions) for filing your Form

Percentage tax. The percentage tax is 7.5% for amounts

720. If you or your designee want to revoke this

paid for taxable transportation of persons by air.

authorization, send a written statement of revocation to the

Department of the Treasury, Internal Revenue Service,

Domestic segment tax. For amounts paid for each

Cincinnati, OH 45999. See Publication 947 for more

domestic segment of taxable transportation of persons by

information.

air, the domestic segment tax is $3.50 per segment for

transportation that begins in 2008.

Part I

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

the domestic segment tax does not apply.

Environmental Taxes

Use Form 6627, Environmental Taxes, to figure the

Transportation of Property by Air (IRS No. 28)

environmental taxes on:

•

The tax is 6.25% of amounts paid for transportation of

Oil spill liability, IRS Nos. 18 and 21;

•

property by air.

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

•

Imported products that used ODCs as materials in the

Use of International Air Travel Facilities

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

•

(IRS No. 27)

The floor stocks tax on ODCs, IRS No. 20 (reported in

Part II).

For amounts paid during 2008 the tax on international flights

is:

Attach Form 6627 to Form 720. The tax rates for these

•

$15.40 per person for flights that begin or end in the

taxes are shown on Form 6627.

United States, or

•

Communications Taxes

$7.70 per person for domestic segments that begin or end

in Alaska or Hawaii (applies only to departures).

Who Must File

The person receiving the payment for communications

Communication and Air Transportation

services must collect and pay over the tax and file the

Taxes—Uncollected Tax Report

return. Enter the amount of tax collected or considered

A separate report is required to be filed by collecting agents

collected for the quarter.

of communications services (local and teletypewriter

Communications Services (IRS No. 22)

service) and air transportation taxes if the person from

whom the facilities or services tax (the tax) is required to be

The tax is 3% of amounts paid for local telephone service

collected (the taxpayer) refuses to pay the tax, or it is

and teletypewriter exchange service.

impossible for the collecting agent to collect the tax. The

Credits or Refunds

report must contain the name and address of the taxpayer,

the type of facility provided or service rendered, the amount

If tax is collected and paid over for nontaxable services from

paid for the facility or service (the amount on which the tax is

the communications tax, the collector or taxpayer may

based), and the date paid.

request a credit or refund as described below and in Notices

2006-50 and 2007-11.

Regular method taxpayers. For regular method

Collectors. The collector may request a credit or refund

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

only if it has repaid the tax to the person from whom the tax

Form 720 on which the tax would have been reported.

was collected, or obtained the consent of that person to the

allowance of the credit or refund. These requirements also

Alternative method taxpayers. For alternative method

apply to nontaxable service refunds.

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

Collectors using the regular method for deposits.

Form 720 that includes an adjustment to the separate

Collectors using the regular method for deposits must use

account for the uncollected tax. See Alternative method on

Form 720X to request a credit or refund.

page 8.

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2008 Page 3

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