| Publication 510 |
2008 Tax Year |
Generally, semimonthly deposits of excise taxes are required. A semimonthly period is the first 15 days of a month (the first
semimonthly period)
or the 16th through the last day of a month (the second semimonthly period).
However, no deposit is required for the situations listed below; the taxes are payable with Form 720.
-
The net liability for taxes listed in Part I (Form 720) does not exceed $2,500 for the quarter.
-
The gas guzzler tax is being paid on a one-time filing.
-
The liability is for taxes listed in Part II (Form 720), except for the floor stocks tax which generally requires a single
deposit.
To avoid a penalty, make your deposits timely and do not mail your deposits directly to the IRS. Records of your deposits
will be sent to the IRS
for crediting to your accounts.
Electronic deposit requirement.
You must make electronic deposits of all depository taxes (such as deposits for employment tax, excise tax, and corporate
income tax) using the
Electronic Federal Tax Payment System (EFTPS) in 2008 if:
-
The total deposits of such taxes in 2006 exceeded $200,000 or
-
You were required to use EFTPS in 2007 or any prior year.
If you are required to use EFTPS and use Form 8109, Federal Tax Deposit Coupon, instead, you may be subject to a 10%
penalty. If you are not
required to use EFTPS, you may participate voluntarily. To get more information or to enroll in EFTPS, visit the EFTPS website
at
www.eftps.gov, or call 1-800-555-4477. Also see Publication 966, The Secure Way to Pay Your Federal Taxes.
Depositing on time. For EFTPS deposits to be on time, you must initiate the transaction at least 1 day before the date the deposit is
due (before 8:00 p.m. Eastern time).
Federal Tax Deposit Coupons.
If you are not making deposits by EFTPS, use Form 8109 to make the deposits at an authorized financial institution.
See the instructions in the
coupon book for additional information. If you do not have a coupon book, call 1-800-829-4933.
You will automatically be enrolled in EFTPS when you apply for an EIN. You will receive a separate mailing containing instructions
for activating
your EFTPS enrollment after you receive your EIN. You will still have the option to use FTD coupons, but see Electronic deposit
requirement,
earlier.
There are two methods for determining deposits: the regular method and the alternative method.
The regular method applies to all taxes in Part I of Form 720 except for communications and air transportation taxes if deposits
are based on
amounts billed or tickets sold, rather than on amounts actually collected. See Alternative method, below.
If you are depositing more than one tax under a method, combine all the taxes under the method and make one deposit for the
semimonthly period.
Regular method.
The deposit of tax for a semimonthly period is due by the 14th day following that period. Generally, this is the 29th
day of a month for the first
semimonthly period and the 14th day of the following month for the second semimonthly period. If the 14th or the 29th day
falls on a Saturday, Sunday,
or legal holiday, you must make the deposit by the immediately preceding day that is not a Saturday, Sunday, or legal holiday.
Alternative method (IRS Nos. 22, 26, 27, and 28).
Deposits of communications and air transportation taxes may be based on taxes included in amounts billed or tickets
sold during a semimonthly
period instead of on taxes actually collected during the period. Under the alternative method, the tax included in amounts
billed or tickets sold
during a semimonthly period is considered collected during the first 7 days of the second following semimonthly period. The
deposit of tax is due by
the 3rd banking day after the 7th day of that period.
Example.
The tax included in amounts billed or tickets sold for the period June 16-30, 2008, is considered collected from July
16-22, 2008, and
must be deposited by July 25, 2008.
To use the alternative method, you must keep a separate account of the tax included in amounts billed or tickets sold during
the month and report
on Form 720 the tax included in amounts billed or tickets sold and not the amount of tax that is actually collected. For example,
amounts billed in
December, January, and February are considered collected during January, February, and March and are reported on Form 720
as the tax for the 1st
quarter of the calendar year.
The separate account for each month must reflect:
-
All items of tax included in amounts billed or tickets sold during the month, and
-
Other items of adjustment relating to tax for prior months (within the statute of limitations on credits or refunds).
The separate account for any month cannot include an adjustment resulting from a refusal to pay or inability to collect unless
the refusal has been
reported to the IRS. See Uncollected Tax Report in chapter 4.
The net amount of tax that is considered collected during the semimonthly period must be either:
-
The net amount of tax reflected in the separate account for the corresponding semimonthly period of the preceding month, or
-
One-half of the net amount of tax reflected in the separate account for the preceding month.
Special rule for deposits of taxes in September 2008.
If you are required to make deposits, see the chart below. The special rule does not apply to taxes not required to
be deposited (see Payment
of Taxes, earlier). See Regulations sections 40.6302(c)-2 and 40.6302(c)-3 for rules to figure the net tax liability for the deposits
due in
September.
Additional deposit of taxes in September 2008
| |
For the Period
|
|
| Type of Tax |
Beginning on |
|
Ending on |
Due Date |
|
Regular method taxes
|
|
|
|
|
|
EFTPS
1 |
Sept. 16
|
|
Sept. 26
|
Sept. 29
|
|
Non-EFTPS
|
Sept. 16
|
|
Sept. 25
|
Sept. 29
|
|
Alternative method taxes (IRS Nos. 22, 26, 27, and 28) (based on amounts billed)
|
|
|
|
|
|
EFTPS
1 |
Sept. 1
|
|
Sept. 11
|
Sept. 29
|
|
Non-EFTPS
|
Sept. 1
|
|
Sept. 10
|
Sept. 29
|
| 1See Electronic deposit requirement, earlier.
|
Deposits for a semimonthly period generally must be at least 95 percent of the net tax liability for that period unless the
safe harbor rule
(discussed later) applies. Generally, you do not have to make a deposit for a period in which you incurred no tax liability.
Net tax liability.
Your net tax liability is your tax liability for the period minus any claims on Schedule C (Form 720) for the period.
You may figure your net tax
liability for a semimonthly period by dividing your net liability incurred during the calendar month by two. If you use this
method, you must use it
for all semimonthly periods in the calendar quarter.
Do not reduce your liability by any amounts from Form 720X.
The safe harbor rule applies separately to deposits under the regular method and the alternative method. Persons who filed
Form 720 for the
look-back quarter (the 2nd calendar quarter preceding the current quarter) are considered to meet the semimonthly deposit
requirement if the deposit
for each semimonthly period in the current quarter is at least ⅙ (16.67%) of the net tax liability reported for the look-back
quarter.
For the semimonthly period for which the additional deposit is required, the additional deposit must be at least 11/90 (12.23%),
10/90 (11.12%) for non-EFTPS, of the net tax liability reported for the look-back quarter. Also, the total deposit for that
semimonthly
period must be at least ⅙ (16.67%) of the net tax liability reported for the look-back quarter.
Exceptions.
The safe harbor rule does not apply to:
-
The 1st and 2nd quarters beginning on or after the effective date of an increase in the rate of tax unless the deposit of
taxes for each
semimonthly period in the calendar quarter is at least ⅙ (16.67%) of the tax liability you would have had for the look-back
quarter if
the increased rate of tax had been in effect for that look-back quarter,
-
Any quarter if liability includes any tax not in effect throughout the look-back quarter, or
-
For deposits under the alternative method, any quarter if liability includes any tax not in effect throughout the look-back
quarter and the
month preceding the look-back quarter.
Requirements to be met.
For the safe harbor rule to apply, you must:
-
Make each deposit timely at an authorized financial institution, and
-
Pay any underpayment for the current quarter by the due date of the return.
The IRS may withdraw the right to make deposits of tax using the safe harbor rule from any person not complying with these
rules.
Tax rate increases.
You must modify the safe harbor rule if there has been an increase in the rate of tax. You must figure your tax liability
in the look-back quarter
as if the increased rate had been in effect. To qualify for the safe harbor rule, your deposits cannot be less than ⅙ of the
refigured
tax liability.
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