Form 8894: How to Stop Filing Certain Excise Taxes

How to Stop Filing Certain Excise Tax Returns

When a business permanently ceases an activity that generates a federal excise tax liability, it must notify the Internal Revenue Service (IRS) that it will no longer be submitting returns for that tax. This is not accomplished by filing a single, universal form. Instead, the notification is typically made directly on the final return of the specific excise tax form. This action informs the IRS that the filing requirement has ended, preventing future notices for unfiled returns.

Eligibility for Filing a Final Excise Tax Return

The primary requirement for being relieved of an excise tax filing obligation is the permanent cessation of the business or activity that created the tax liability. A temporary or seasonal pause in operations does not qualify a taxpayer to file a final return. For example, a business liable for taxes on Form 720, Quarterly Federal Excise Tax Return, for selling taxable fuels must have permanently closed or sold that part of its operation.

For businesses that operate heavy trucks on public highways, the requirement to file Form 2290, Heavy Highway Vehicle Use Tax Return, ends when they no longer have any taxable vehicles registered in their name. Similarly, a taxpayer who accepted wagers and filed Form 11-C, Occupational Tax and Registration Return for Wagering, would only stop filing when they have permanently ceased all wagering activities.

Information Required for a Final Return

To properly notify the IRS, the taxpayer must complete their last required excise tax return with all the standard information. This includes the business’s full name, address, and Employer Identification Number (EIN). On both Form 720 and Form 2290, there is a specific checkbox, typically located near the top of the form, labeled “Final return” that must be checked.

By checking this box, the taxpayer attests that they will not have a future liability for that specific tax. The return must cover the final period during which the taxable activity occurred; for instance, if a trucking company sells its last heavy vehicle in August, it must file a final Form 2290 for that tax period and check the final return box.

Submitting the Final Return and Next Steps

Once the final excise tax return is completed with the “Final return” box checked, it must be submitted to the IRS by its regular due date using the mailing address in the form’s official instructions. Retain a copy of the filed final return for business records as proof of this notification to the IRS. After the IRS processes the final return, it updates its records to show that the taxpayer no longer has a filing requirement for that tax.

The IRS does not send a confirmation letter or approval notice in response to a final return. The taxpayer must continue to file all required excise tax returns for all periods until the one designated as final, as failing to file returns due before then can lead to penalties and interest.