Excise taxes are imposed by the government on several different services and goods such as diesel, gasoline, tobacco products, distilled spirits, and a few firearms. The manufacturers or providers of these products and services are liable for an excise tax. Similar to income tax or corporate tax, the excise taxes have to be filed according to the defined
procedures.
So, in case there are any glitches while filing excise taxes or in their payment, the IRS holds a right to impose penalties on the taxpayers.
Purchase of tax stamps is required when filing some excise taxes. If a taxpayer fails to do so, a penalty is charged according to the specified norms. If a certain taxpayer has made advance payment of excise tax, evidence regarding the same is required when filing the returns at the end of the tax year. Just like there is a penalty imposed on the non-payment of taxes or the late filing of returns in case of income tax, these are the situation where the IRS can penalize taxpayers regarding the excise duties.
Some excise taxes require the retailers to collect the tax. If manufacturers, suppliers and retailers fail to comply with the tax rules as defined by law, there are plenty of penalties that may be applied by the IRS. Besides, there are some penalties which must be paid in the form of an excise tax itself. For instance, there is an excise tax imposed on charitable trusts and private foundations for carrying out transactions that are prohibited and some other failures. Also, there are penalties in the form of excise taxes for pension plans and benefit plans for a number of failures related to non-payment or accuracy while filing.