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Telephone Tax Refund
The IRS will be giving everyone a gift when it comes to their 2006 taxes! The IRS has finally terminated the federal excise tax on long-distance telephone service.
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In place since 1898, the initiative allowed for a tax of up to 3% of the total services billed to long distance consumers. And, while the federal excise tax on local telephone service remains in place, the IRS is offering a one-time refund of all excise taxes paid (with interest) on long distance service (via landline, cell phone, or VoIP) after February 28, 2003 and prior to August 1st, 2006. Taxpayers can claim this refund on their 2006 returns.
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If you no longer have access to your phone bills from the last few years, don't worry. The IRS has come up with an easy solution to help taxpayers. They have established standard refund amounts that range between $30 - $60 depending upon the taxpayer's number of exemptions. To claim this refund, taxpayers will have simply to fill out a single line on their 2006 1040, 1040A, 1040NR, or 1040EZ tax forms. Take advantage of this easy tax-break this April, and let Uncle Sam put a few bucks back in your pocket.
What is the telephone tax refund?
The telephone tax refund is a one-time payment available on your 2006 federal income tax return, designed to refund previously collected long-distance federal excise taxes. It is available to anyone who paid long-distance taxes on landline, cell phone or Voice over Internet Protocol (VoIP) service.
Why is the government refunding these taxes?
Several recent federal court decisions have held that the tax does not apply to long-distance service as it is billed today. The IRS is following these decisions and refunding the portion of the tax charged on long-distance calls. The IRS is also refunding taxes collected on telephone service under plans that do not differentiate between long distance and local calls.
The telephone tax continues to apply to local-only service, and the IRS is not refunding taxes charged on local-only service.
The IRS will refund to you the taxes on long-distance service billed to you for the period after Feb 28, 2003 and before Aug 1, 2006. Taxpayers should request this refund next year when they file their 2006 tax returns.
How do I get the telephone tax refund?
In general, anyone who paid the long-distance telephone tax will get the refund on their 2006 federal income tax return. This includes individuals, businesses and nonprofit organizations. The 2006 return is usually filed during 2007.
The IRS is making it easier for taxpayers by offering a standard refund amount between $30 and $60, so they don't need to gather old phone bills. Taxpayers who choose the standard amount will only need to fill out one line on their tax returns. The standard amount is based on actual telephone usage data and the amount applicable to a family or other household reflects the long-distance phone tax paid by similarly sized families or households. Using this amount is the easiest way for taxpayers to get their refunds and avoid gathering 41 months of old phone records.
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