Who Must File IRS Form 720? Eligibility, Requirements and Filing Rules Explained
Federal excise taxes are a niche corner of the United States tax return landscape, but they can create outsized risk because they are often triggered by day-to-day operations (selling fuel, importing chemicals, offering certain insurance products, sponsoring a health plan) rather than annual profit.
If you are searching Who Must File IRS Form 720, the practical goal is usually the same: confirm whether your business has a filing obligation this quarter, and if so, what rules matter most so you avoid penalties, missed credits, and messy amendments.
Who Must File IRS Form 720
You generally must file IRS Form 720 (Quarterly Federal Excise Tax Return) for a quarter if you are liable for any federal excise tax reported on the form during that quarter.
Liability is activity-based, not entity-type based. That means “we are not a manufacturer” or “we are an LLC” does not answer the question. The correct question is: Did we perform (or were we responsible for) a taxable activity the IRS lists under Form 720 this quarter?
The IRS publishes the official form and instructions here: Form 720 and instructions (IRS).
Common business situations that trigger Form 720
Form 720 covers multiple categories of excise taxes. The most common triggers tend to cluster in a few operational buckets:
Fuel-related activities (selling certain fuels, using fuel in certain ways, blending, or being positioned in the supply chain where excise applies)
Environmental taxes (including Superfund chemical excise taxes affecting some manufacturers and importers)
Communications and air transportation (certain taxable services)
Manufacturers and retailers of specific products (depending on the item)
Foreign insurance (U.S. risks covered by foreign insurers can create a filing obligation for the party responsible for the tax)
Health-plan related fee filing, namely the PCORI Fee
The important strategic insight: Form 720 obligations are often discovered late because responsibility can sit in accounting, operations, procurement, benefits, or risk management. The companies that stay compliant usually have a simple “trigger review” process that routes new products, vendors, imports, and benefit plan changes through a tax check.
Eligibility and responsibility: who files is not always who pays
A frequent source of errors is assuming the obligation always sits with whoever benefits economically.
For excise taxes, the liable party is usually defined by role (manufacturer, importer, broker, seller, insurer, plan sponsor, etc.) and transaction facts (where risk is located, what was sold, what was imported, how it will be used).
To make this actionable, here is a simplified mapping of common triggers to the typical filer.
| Excise tax / fee area | What triggers the obligation | Typical party responsible for filing Form 720 |
|---|---|---|
| PCORI Fee | Sponsoring a self-insured health plan or issuing specified health insurance | Employers/plan sponsors (self-insured) or insurers (fully insured) |
| Environmental tax | Manufacturing, selling, or importing covered chemicals/substances | Manufacturers, importers |
| Fuel excise tax | Selling, removing, blending, or using taxable fuels in covered scenarios | Fuel businesses across the supply chain, depending on facts |
| Air transportation / communications | Providing certain taxable services | Service providers (and sometimes collecting from customers) |
| Foreign insurance | Premiums paid to foreign insurers on U.S. risks | The party identified under the tax rules (varies by arrangement) |
This table is intentionally high-level. The filing decision should be confirmed against the Form 720 instructions and your contract chain (who is the seller of record, importer of record, plan sponsor, insurer, etc.).
The PCORI Fee: a top reason many non-excise businesses still file
The PCORI Fee is one of the most common reasons otherwise ordinary employers search form 720 pcori and “pcori form 720.”
Key rule to remember: many employers file Form 720 only once per year to report the PCORI Fee.
The PCORI Fee is generally reported on Form 720, second quarter.
That return is generally due July 31 each year.
If you want the definitive source, start with the IRS PCORI hub: PCORI Fee (IRS).
Strategic advice for PCORI compliance what experienced finance teams do
PCORI mistakes are often process failures, not tax-knowledge failures. The cleanest approach is to treat PCORI as a mini-close:
Confirm whether the plan is self-insured (common with HRAs and certain employer-sponsored arrangements)
Assign covered lives counting responsibility early (benefits team) and build a sign-off step for finance
Keep documentation for the counting method used and the plan year dates
In acquisitions, investors often look for silent liabilities that do not show up in income tax workpapers. PCORI and excise items are common examples because they can live outside the main tax calendar. Even a small quarterly or annual filing can become expensive after penalties and interest if missed for multiple periods.
Filing rules that drive penalties and how to avoid them
Two rules matter most in practice:
1) Form 720 is quarterly, but not everyone files every quarter
You file Form 720 for each quarter you are liable. If you only owe the PCORI Fee, you typically file the second-quarter Form 720 only.
Quarter due dates are typically:
| Quarter Covered | Due Date (Typical) |
|---|---|
| Jan to Mar | April 30 |
| Apr to Jun | July 31 |
| Jul to Sep | October 31 |
| Oct to Dec | January 31 |
If a due date falls on a weekend or legal holiday, the due date generally moves to the next business day.
2) Deposits can be separate from filing
Some excise taxes require periodic deposits depending on the type and size of liability. A common lesson learned is that “we filed on time” does not always mean “we deposited correctly.” If you are in a higher-liability category (often fuel), confirm whether deposit rules apply for your situation in the IRS instructions.
Refunds and credits: when Form 8849 enters the picture
If you are eligible for an excise tax refund or credit, you may need Form 8849 (Claim for Refund of Excise Taxes) rather than (or in addition to) adjustments on Form 720.
Typical situations where form 8849 comes up include certain fuel-related claims and other excise tax refund mechanisms depending on the schedule and facts. The most important practice point is documentation: successful claims depend on support like invoices, proof of payment, and use-case records.
IRS Form 720 Cost and pricing: what to budget
Searches like IRS Form 720 Cost usually have two components:
Taxes owed (the actual excise tax liability)
Compliance costs (time, internal labor, advisor fees, or e-file provider fees)
Because provider pricing varies by complexity (single PCORI filing vs. multi-category excise returns, amendments, attachments, multiple EINs), the smartest way to evaluate cost is to compare the total workflow impact, not just a headline fee.
Here is a practical comparison framework:
| Filing Approach | Best For | Typical Tradeoff |
|---|---|---|
| In-house manual prep | Simple, low-volume filings with strong internal expertise | Higher error risk, more time spent tracking rules and formatting |
| CPA or specialist firm | Complex situations, high-risk categories, or audits | Higher advisory cost, lead times, coordination overhead |
| IRS-authorized e-file provider | Teams that want speed, validation checks, and an electronic paper trail | Provider fees vary by form type and complexity |
If you are training a team to handle recurring compliance conversations (for example, gathering the right facts from operations or answering stakeholder objections about process changes), scenario-based practice can help. Tools like Scenario IQ roleplay training are designed to build consistent communication and reduce preventable handoff errors.
Filing online: where E Eile Excise 720 fits
If you decide to e-file, use an IRS-authorized provider. E Eile Excise 720 (eFileExcise720) is an IRS-authorized online platform for Form 720 that supports all Form 720 categories and also supports Form 720 amendments (720-X) and Form 8849 claims. It is designed to keep filing straightforward with secure data handling, free account creation, no software download, and personalized customer support.
Frequently Asked Questions
Who must file IRS Form 720?
Businesses and organizations must file Form 720 for any quarter in which they are liable for a federal excise tax or fee reported on the form (including the PCORI Fee for many filers).
Do I have to file Form 720 every quarter?
Not necessarily. You file Form 720 for each quarter you are liable. Many PCORI-only filers typically submit only the second-quarter Form 720.
Where do I report the PCORI Fee?
The PCORI Fee is generally reported on Form 720 (often referred to as form 720 PCORI or PCORI form 720) and is typically filed with the second-quarter return due July 31.
When should I use Form 8849 instead of Form 720?
Use Form 8849 to claim certain excise tax refunds or credits (commonly for eligible fuel-related claims and other specific excise refund categories), based on your facts and the applicable schedules.
What is the IRS Form 720 cost?
There is no “one size” cost. Your total cost includes any excise tax due plus compliance costs (internal time, advisor help, and/or provider pricing). The best estimate comes from matching your categories, frequency, and documentation workload to the filing method.
File Form 720 with less guesswork
If you have confirmed you are liable this quarter (or you are filing the PCORI Fee), consider e-filing to reduce rework and get a clean submission record. You can create a free account and file online with eFileExcise720, an IRS-authorized e-file portal built specifically for Form 720, 720-X amendments, and Form 8849 claims support.