Form 6197 Made Simple – Complete Explanation
What is Form 6197 and Its Purpose?
IRS Form 6197, also known as the Gas Guzzler Tax form, is used to calculate and report the Gas Guzzler Tax. This tax is imposed on manufacturers and importers of new passenger cars that fail to meet the required fuel economy standards. The purpose of the form is to ensure that vehicles with poor fuel efficiency contribute additional tax revenue, encouraging the production and use of more fuel-efficient cars.
It’s important to note that this tax applies only to passenger cars and does not cover SUVs, vans, or trucks, since these were not widely used for non-commercial purposes when the tax was introduced.When is Form 6197 Filed?
Form 6197 is not a quarterly recurring return. Instead, it is a one-time filing, submitted only when a taxable vehicle is sold or imported. The form must be filed along with Form 720 (Quarterly Federal Excise Tax Return) for the quarter in which the taxable event occurred.
This means if a manufacturer or importer sells a new passenger car that falls below the required fuel economy standards, they must file Form 6197 with Form 720 for that specific quarter to report and pay the Gas Guzzler Tax.
One-Time Filing: Who Qualifies?
You may be eligible to make a one-time filing of Forms 6197 and 720 if both of the following conditions are met:
You do not import gas-guzzling automobiles in the course of your trade or business.
You are not otherwise required to file Form 720 for that calendar quarter, except for this one-time filing.
If you meet both criteria, your reporting obligations are limited to this one filing.
How to File Form 6197?
Manual Filing (Paper Filing)
Below is a clear step-by-step guide to help you file Form 6197 manually with ease.
Step 1: Download the Form
Get the latest version of Form 6197 from the IRS website.
Step 2: Provide Basic Information
Enter the taxpayer’s name, quarter ending and EIN (Employer Identification Number).
Step 3: Report the Number of Cars Sold
Enter the number of cars sold under the correct fuel economy (mpg) line for the automobile model type that applies to your vehicle.
Step 4: Calculate the Tax Amount
Each fuel economy line already has a fixed tax rate. Multiply the value in Column (d) by the tax rate in Column (c), and record the result in Column (e).
Step 5: Find the Total Tax Liability
Add all the values in Column (e) from Line 2 through Line 12. Enter this total in the corresponding IRS Number 40 of Form 720.
Step 6: Provide Vehicle Details in Part II
In Part II, enter detailed information about your vehicle(s):
Line number from Part I
Fuel economy rating
Number of vehicles
Make, model name, and model year
Make sure to list each vehicle type on a separate line corresponding to the line numbers used in Part I.
Online Filing (E-File)
This method is fast and accurate. With our IRS-authorized portal, Simple720, you get a seamless interface that combines both Form 720 and Form 6197 allowing you to file everything in a single go.
Check out our blog for a step-by-step guide to filing Form 6197 online. Get clear, detailed instructions and complete your filing in just minutes.Conclusion
Form 6197 is a specialized tax form designed to report the Gas Guzzler Tax on fuel-inefficient passenger cars. It is filed once, along with Form 720, for the quarter in which a taxable sale or import occurs. While manual filing requires detailed paperwork and calculations, Simple720 makes the process quick, accurate, and IRS-approved through online filing.
By understanding Form 6197 and its filing requirements, businesses can stay compliant, avoid penalties, and handle their federal excise taxes with confidence.