The form has black writing on the back side of the form.
The paper out sensor on the P7000 series printer is an optical sensor. If you are printing a pre-printed form that has writing on the back (think similar to a car rental contract) it will interfere with the paper out sensor, and cause a false paper out front panel error.
The solution is to order the ‘Black Back Sensor’ kit (part number 170172-001) from Printronix. This kit contains a replacement paper out sensor that accepts black back forms, as well as plain paper.