U.S. Tax Form 720 Quarterly Federal Excise Tax Return
Who Must Use This Form?
This form is used to report an assortment of excise taxes and is filed quarterly. It should be used to accompany any payment of the 1% federal excise tax on premium payments to foreign insurance companies, unless such payments are exempted by a treaty. If the payment is exempt from the 1% excise tax because of a treaty, a disclosure is required on Form 8833 - which is filed with the taxpayer's income tax return.
What Information Is Required?
The form only requires the name, address and TIN of the taxpayer and the amount of premiums paid and the amount of the excise tax due.
When Is It Due?
Form 720 is to be filed one month after the end of each calendar quarter, except for certain kinds of excise taxes that are not for the payment of premiums to foreign insurance companies.
Where Should It Be Filed?
Mail the form and the tax payment to the IRS Center, Cincinnati, OH, 45999-0009
How Long Does It Take To Prepare?
It should only take a few minutes to complete this form each quarter in which a premium payment is made to a foreign insurance company.
Why Comply ? (Penalties)
It appears that the penalties for late filing, late payment or non filing of this return are the same as for late filing, late payment or non filing of income tax returns and the penalties are based on the amount of taxes that are due with the return.
In some cases, the 1% excise tax may be reduced or eliminated by treaty. The current treaty between the US and Switzerland exempts Swiss insurance and annuities from the excise tax. The U. S. treaty with Switzerland provides: "...the Convention shall, however, apply to excise taxes imposed on insurance premiums paid to foreign insurers only to the extent that the risks covered by such premiums are not reinsured with a person not entitled to the benefits of this or any other Convention which provides exemption from these taxes." When a tax treaty is used to justify non-payment of a tax or the non-filing of a return, the taxpayer is required to file Form 8833 - Treaty Based Returns Position Disclosure.Download PDF