Rev. Rul. 60-312

The Internal Revenue Service has been asked whether, for purposes of the period of limitations prescribed by section 6501 of the Internal Revenue Code of 1954, a return is considered to have been filed, under the circumstances described below, for all of the categories of excise taxes listed on Form 720, Quarterly Federal Excise Tax Return.

A person filed a Form 720 on which the word `none' had been written across the length of the form, thereby indicating no liability for the return period but not stating for which category of tax the return was intended. Another person filed a Form 720 on which the word `none' was written in the upper summary portion of the form (Items 1 through 5) in such a way as to indicate no liability, but no entry was made in the portion of the form which lists various categories of excise taxes.

Section 6501(a) of the Code provides the general rule that the amount of any tax imposed by the Code shall be assessed within three years after the return was filed (whether or not such return was filed on or after the date prescribed), and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period. However, section 6501(c) of the Code provides that the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time, (1) in the case of a false or fraudulent return with intent to evade tax, (2) in the case of a willful attempt in any manner to defeat or evade certain taxes, or (3) in the case of failure to file a return.

As an amplification of Revenue Ruling 58-274, C.B. 1958-1, 495, it has been held in Revenue Ruling 59-366, C.B. 1959-2, 418, that where a person files a Form 720 on which he reports one or more categories of tax, but makes no entry on the return concerning any other category, he has filed no return for the category of tax for which no extry was made. In effect, a blank space opposite a category of excise tax on Form 720, even though due to oversight or to incompletion of the form, will not be considered as a return for that category.

However, Revenue Ruling 59-366 further holds that where a person enters on any line of Form 720 the word `none,' a `zero,' or some other comparable entry clearly indicating a denial of liability for a category of tax, such entry constitutes the filing of a return for the category of excise tax to which that line relates. Therefore, with respect to that category of tax, the period of limitations prescribed by section 6501 of the Code starts to run from the date the return is filed.

Where, as in the instant case, a person who files Form 720 writes the word `none' across the length of the form or in the upper summary portion of the form in such a manner that it clearly indicates a positive denial of liability for all categories of the excise taxes listed on the form, that action is considered to be tantamount to writing the word `none' on each line. Accordingly, for purposes of the exception provided by section 6501(c)(3) of the Code to the period of limitations prescribed by section 6501(a) of the Code, a return is considered to have been filed by that person for all of the categories of excise taxes listed on the form.

Therefore, with respect to the person submitting the Form 720 under those circumstances, the amount of any tax which should have been reported on the return for that reporting period must be assessed within three years after the return was filed, unless one of the exceptions provided by section 6501(c)(1) and (2) of the Code is applicable in a particular situation. However, compare Revenue Ruling 59-127, C.B. 1959-1, 656, which relates to the applicability of the period of limitations to persons upon whom the so-called `collected' excise taxes are imposed.

Revenue Ruling 59-366 is hereby amplified.