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If you've been mailing paper returns to the IRS, you're not alone — but in 2026, that habit may be costing you more than you think. Between processing backlogs, penalty risks, and the IRS's clear push toward digital, the question isn't really can you switch from paper to online tax filing. The real question is: why haven't you already?

This guide covers everything businesses need to know about making that switch — especially for federal excise taxes like Form 720 and the 8849 form.

Why the IRS Wants You Off Paper in 2026

The IRS has been clear about its modernization goals. Based on the IRS Inspector General's 2026 Filing Season Readiness Report, the agency is dealing with significantly reduced staffing and record-breaking processing backlogs. For excise tax filers in particular, this means paper-filed Form 720 and Form 8849 returns face a much higher risk of:

• Extended processing delays (sometimes months)
• Auto-generated penalty notices triggered before your paper return is even reviewed
• Increased likelihood of audit review due to manual processing errors

Under Executive Order 14247, the federal government is also actively phasing out paper refund checks and paper submissions in favor of electronic payment and filing systems. The direction is unmistakable — and if your business files quarterly excise taxes, acting now puts you ahead of the curve.

Yes, You Can Switch From Paper to Online — Here's How

Switching your excise tax filing from paper to online is entirely possible, and the IRS actively supports it. Here's what the transition looks like step by step.

Step 1: Understand What You're Filing

Before making the switch, identify which forms apply to your business:

• Form 720 (Quarterly Federal Excise Tax Return) — This is the primary form for reporting and paying federal excise taxes. If your business deals in fuel, air transportation, indoor tanning, heavy vehicles, health plan PCORI fees, environmental taxes, or manufacturing of specific goods, you're likely required to file Form 720 every quarter.
• 8849 Form (Claim for Refund of Excise Taxes) — If you've overpaid or are entitled to a refund on previously paid excise taxes (such as nontaxable fuel use), Form 8849 is how you claim it back. This form is also available for electronic filing through an IRS-authorized provider.

Step 2: Choose an IRS-Authorized E-File Provider

This is the most critical step. The IRS does not allow excise tax returns to be filed through its standard Free File program. To e-file Form 720 or the 8849 form, you must use an approved provider operating within the IRS Modernized e-File (MeF) system.

eFile Excise 720 is an IRS-authorized e-file provider with over a decade of experience and more than 500 businesses trusting the platform for their quarterly federal excise tax compliance. The platform is SOC 2 certified, supports all 66 Form 720 excise tax categories, and delivers real-time IRS acknowledgment — often within minutes of submission.

Step 3: Gather Your Tax Information

When you're ready to file online, have the following on hand:

• Your Employer Identification Number (EIN)
• The excise tax categories that apply to your business (e.g., fuel taxes, PCORI fees, tanning service taxes, communications taxes)
• Prior quarter returns for reference, especially if you're filing a Form 720-X amendment
• Bank account details for electronic payment via EFTPS (Electronic Federal Tax Payment System)

Step 4: File and Receive IRS Confirmation

With an authorized provider, your return is transmitted directly and securely to the IRS. Unlike paper filings where confirmation can take weeks, electronic submissions through the MeF system return an IRS acknowledgment almost immediately. You'll know your return was accepted — no guessing, no waiting.

What Happens to a Paper Return You Already Mailed?

If you've already submitted a paper return for a prior quarter, you don't need to re-file electronically — doing so could result in a duplicate submission. However, if you need to correct a previously filed return, you can use Form 720-X, which is designed specifically to amend excise tax liability from past quarters. This amendment process can also be completed online.

Going forward, it's best to make the clean switch to electronic filing as early as possible to avoid the compounding risks that paper submissions now carry in 2026's processing environment.

The Real Cost of Staying on Paper

Many businesses that still file by mail underestimate what it's actually costing them — beyond just postage. Here's what paper filing risks in 2026:

Processing Delays: With IRS backlogs at historic levels, a paper Form 720 may sit unprocessed for months. Meanwhile, your business technically remains in a compliance gray zone.

Auto-Generated Penalties: The IRS system may flag your account as non-compliant before your paper return is even opened. This can trigger penalty notices that require time and effort to resolve — even if you filed on time.

No Paper Trail of Receipt: Unlike electronic filing, mailing a return gives you no guaranteed confirmation that the IRS received it. Lost mail happens — and the burden of proof falls on the filer.

Missed Refund Opportunities: If you're entitled to a refund through the 8849 form, paper processing delays mean your refund takes significantly longer to arrive. E-filing accelerates the entire refund timeline.

Who Needs to Make the Switch? (Businesses That File Form 720)

If any of the following apply to your business, you're required to file Form 720 — and you should be doing it electronically:

• Fuel distributors, gas stations, and fuel resellers filing under Fuel Excise Tax
• Businesses sponsoring self-insured health plans subject to the PCORI fee
• Air transportation companies filing under Communications and Air Transportation Tax
• Manufacturers and importers dealing in tires, coal, vaccines, or gas-guzzler vehicles under Manufacturing Tax Filing
• Businesses subject to Environmental Taxes (oil spill taxes, ODCs, chemical taxes)
• Indoor tanning service providers
• Foreign insurers under Foreign Insurance Tax

Not sure whether your business qualifies? Visit our Form 720 FAQs for a complete breakdown.

2026 Form 720 Filing Deadlines — Don't Miss Them

Form 720 is filed quarterly. The 2026 deadlines are:

Electronic filing ensures you hit these deadlines without worrying about postal transit times or processing queues.

Frequently Asked Questions

Can I switch from paper to online filing mid-year for Form 720?
Yes. There is no restriction on when during the year you can switch to electronic filing. You can begin e-filing Form 720 for any quarter going forward, regardless of how you filed in prior quarters.

Do I need to notify the IRS that I'm switching from paper to e-file?
No. Simply stop mailing paper returns and begin filing through an IRS-authorized e-file provider. No prior notification to the IRS is required.

Is electronic filing of Form 720 mandatory?
As of 2026, electronic filing of Form 720 remains optional but strongly recommended. However, given current IRS processing backlogs, paper submissions carry a significant risk of delays and penalty notices.

Can I e-file Form 8849 as well?
Yes. The 8849 form — including Schedules 1, 2, 3, 5, 6, and 8 — is available for electronic filing through an IRS-authorized MeF provider. eFile Excise 720 supports all Form 8849 schedule types.

What if I made an error on a previously paper-filed Form 720?
Use Form 720-X to amend your previously filed excise tax return. This amendment can be completed and filed electronically through our platform.

Is it safe to file excise taxes online?
Yes, provided you use an IRS-authorized provider. eFile Excise 720 is SOC 2 certified, meaning your data is protected with bank-level encryption. The platform transmits your return directly to the IRS through a secure, approved system.

Does online filing cost more than paper filing?
There is a service fee associated with using an IRS-authorized e-file provider. At eFile Excise 720, Form 720 filing is just $35.95 per quarterly return — a modest cost compared to the time, postage, and risk exposure involved in paper filing.

Make the Switch Today — It Takes Less Than 10 Minutes

Switching from paper to online excise tax filing is one of the most practical compliance improvements your business can make in 2026. With processing backlogs at historic levels, the IRS strongly advising against paper submissions, and electronic confirmation available within minutes, there's no compelling reason to keep mailing returns.

eFile Excise 720 makes the transition simple. Create your free account, enter your tax data, review and e-sign, and submit — all in five easy steps. IRS-authorized, SOC 2 secure, and trusted by businesses nationwide.

File Form 720 Online Now →