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Official form guide
Form 8725: Excise Tax on Greenmail
IRS Form 8725 is the Excise Tax on Greenmail return that reports and pays the 50% excise tax imposed under IRC §5881. Taxpayers liable for greenmail must file a separate form for each stock‑transfer agreement, due within 90 days of receipt.
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IRS Form 8725 - Excise Tax on Greenmail
IRS Form 8725 is the Excise Tax on Greenmail return that reports and pays the 50% excise tax imposed under IRC §5881. Taxpayers liable for greenmail must file a separate form for each stock‑transfer agreement, due within 90 days of receipt.
Risk Radar
Scan points- 1Missing the 90‑day filing deadline triggers a 5%‑per‑month penalty up to 25% of tax due.
- 2Failing to file a separate Form 8725 for each stock‑transfer agreement
- 3Omitting the 90‑day filing deadline and filing after the due date
- 4Leaving line 8 blank or entering an incorrect tax amount
- 5Not providing direct‑deposit information on lines 9b‑9d when there is an overpayment
Plain English
Form 8725 reports the greenmail excise tax and provides a way to pay it. You enter the tax due, any overpayment, and your bank details. The form must be signed and mailed to the IRS.
Submission Date
- Filing date: 2026-01-08 12:10:40
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when you are liable for the 50% excise tax on greenmail under IRC §5881 and need to report and pay the tax for a stock‑transfer agreement.
- Do not use it when you are not liable for the greenmail excise tax.
- Check Form 7004 instead when you need an automatic extension of time to file Form 8725.
Form selector
Use this form or another form?
Need more time to file Form 8725
Provides an automatic filing extension but does not extend the payment deadline
✓ Confirm the extension request is filed by the original due date
Filing deadline approaching and you require additional time
Grants an extension of the filing deadline while payment remains due
✓ Verify the extension is submitted before the 90‑day due date
Unable to meet the 90‑day filing window due to circumstances
Allows filing after the deadline with an approved extension
✓ Ensure the extension is approved to avoid late‑filing penalties
Deadline or filing window
The filing deadline begins when any portion of greenmail is received. Form 8725 must be filed within 90 days of that receipt. An extension can be obtained by filing Form 7004 by the original due date, but the extension does not apply to payment of the tax.
Checklist
What you need before filling it out
Line 4 – Other Income
Amount of other income subject to the excise tax · Form 8725, line 4
Line 5 – Total Gain and Other Income
Recognized portion of the amount · Form 8725, line 5
Line 6 – Tax
Computed excise tax amount · Form 8725, line 6
Line 8 – Tax Due
Full tax amount due · Form 8725, line 8
Lines 9b‑9d – Direct deposit information
Bank routing number, account number, account type · Form 8725, lines 9b‑9d
Before you submit
- 1Verify the form revision date reads 12/2025.
- 2Confirm you are liable for the excise tax under IRC §5881.
- 3Enter the name and address exactly as shown on your most recent federal return.
- 4Report any other income on line 4, if applicable.
- 5Calculate and enter total gain and other income on line 5.
- 6Compute tax on line 6 and ensure no deduction is claimed.
- 7Enter any tax paid with Form 7004 on line 7.
- 8Pay the full amount shown on line 8 electronically if possible.
- 9If there is an overpayment on line 9a, provide correct direct‑deposit details on lines 9b‑9d.
- 10Sign the form in the signature block.
- 11Attach any additional pages with your name and identifying number.
How to file this form
- 1Complete the form by entering name, address, and identifying number.
- 2Report other income on line 4 and total gain on line 5.
- 3Calculate tax on line 6 and record any tax paid with Form 7004 on line 7.
- 4Pay the tax due on line 8 and, if overpayment exists, fill direct‑deposit fields 9b‑9d.
- 5Sign the form in the signature block.
- 6Mail the completed Form 8725 to the Kansas City IRS address and retain a copy as proof of filing.
Known limitations
- 1Form 8725 does not apply when the filer is not liable for the excise tax on greenmail under IRC §5881.
- 2Form 8725 does not apply if the shareholder held the stock for two years or more before the transfer agreement, because greenmail requires a holding period of less than two years.
- 3Form 8725 does not apply to transactions that are not considered greenmail, i.e., where no gain or other income is realized under the filer’s method of accounting.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
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Fillable formOpen in Editor->The form is the Rev. 12‑2025 edition; the source directs users to IRS.gov/Form8725 for the latest information.
What changed or needs a fresh check
- Edition date — confirm the revision reads 12/2025
- Fee — not stated in the official source
- Mailing address — confirm the address is Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999
- Signature — confirm the signature follows the instructions for the signature section of your federal income tax return
Quick Facts
Downloads
After you file
- 1Retain a copy of the filed Form 8725 and any attachments for your records.
- 2If there is an overpayment, expect a refund via the direct‑deposit information entered on lines 9b‑9d.
- 3If more time to file is needed, submit Form 7004 by the Form 8725 due date; note that this does not extend the payment deadline.
- 4If an error is discovered, file a corrected Form 8725 with “Amended” written at the top of the form.
Sources
- SRCInstructions p.1 — filing deadline is the 90th day following receipt of any portion of the greenmail.
- SRCInstructions p.1 — use Form 7004 to request an automatic extension of the filing deadline.
- SRCInstructions p.1 — Form 7004 does not extend the time for payment of tax.
- SRCInstructions p.2 — overpayment refund information entered on lines 9b, 9c, and 9d; line 9a under $1 requires written request.
- SRCInstructions p.1 — money items may be shown as whole dollars by rounding per the provided rule.
- SRCInstructions p.1 — to amend, file a corrected Form 8725 and write “Amended” at the top of the form.
- SRCInstructions p.1 — file a separate Form 8725 for each agreement made to transfer stock.
- SRCInstructions p.1 — greenmail is defined as a payment to a shareholder who held the stock for less than 2 years before the transfer agreement.
Common confusion points
When is the filing deadline?
The instructions say the form is due the 90th day after any greenmail is received.
→ Verify the date is within 90 days of receipt.
Can I extend the filing deadline with Form 7004?
Form 7004 provides an automatic extension for filing the form.
→ Submit Form 7004 by the original Form 8725 due date.
Does Form 7004 also extend the payment deadline?
The instructions state Form 7004 does not extend the time for payment of the tax.
→ Pay any balance due by the original 90‑day deadline.
How do I receive a refund if I overpaid?
Overpayments are refunded through direct deposit entered on lines 9b‑9d; refunds under $1 require a written request.
→ Complete lines 9b‑9d and keep the request if the overpayment is under $1.
Do I need to round amounts on the form?
The instructions require rounding money items to whole dollars, dropping cents under 50 and rounding up 50‑99 cents.
→ Round each line amount according to the rule before entering it.
Do I need a separate Form 8725 for each stock transfer?
The instructions require a separate form for each agreement to transfer stock.
→ File an individual Form 8725 for every greenmail agreement.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 7004 – does not extend the payment deadline, so ensure tax is paid on time.
Questions about IRS Form 8725
What is IRS Form 8725 used for?
Form 8725 reports the greenmail excise tax and provides a way to pay it. You enter the tax due, any overpayment, and your bank details. The form must be signed and mailed to the IRS.
Who must file IRS Form 8725?
You must file Form 8725 if you are liable for the excise tax on greenmail under section 5881.
What information does IRS Form 8725 require?
The form reports the 50% excise tax on greenmail, the amount due on line 8, and any overpayment on line 9a with direct‑deposit information on lines 9b‑9d.
When is IRS Form 8725 due?
File Form 8725 by the 90th day following receipt of any portion of the greenmail.
Where do I file IRS Form 8725?
Send the completed form to the Internal Revenue Service, Kansas City, MO 64999.
How do I complete IRS Form 8725?
Enter your name and address as shown on your most recent tax return, calculate the 50% excise tax and record it on line 8. If you have an overpayment, enter the amount on line 9a and provide direct‑deposit details on lines 9b‑9d. Sign the form in the signature section and, if a paid preparer assisted, have the preparer sign and include their PTIN. Mail the signed form to the Kansas City address, attaching any extra pages with your identifying number.
What happens if IRS Form 8725 is filed incorrectly?
Late filing incurs a penalty of 5% per month, up to 25%, and late payment adds a penalty of 0.5% per month, up to 25% of the unpaid tax.
When is the filing deadline?
The instructions say the form is due the 90th day after any greenmail is received. Verify the date is within 90 days of receipt.
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