[Infowarrior] - U.S. Government to Refund Telephone Taxes

[Richard Forno]

U.S. Government to Refund Telephone Taxes
Marcus Yam (Blog) - January 4, 2007 6:25 PM
http://www.dailytech.com/article.aspx?newsid=5552

The Internal Revenue Service today began a busy 2007 filing season that
features a new refund deposit feature and, perhaps more interestingly, a
telephone excise tax refund that could put at least $30 into your pocket.

Individual taxpayers will be able to request a refund if they paid the
federal excise tax on long-distance or bundled service on landlines,
wireless and even VoIP. The U.S. government stopped collecting the federal
excise tax on long-distance service in August and announced plans to provide
refunds of these taxes billed after Feb. 28, 2003, and before Aug. 1, 2006.
More than 146 million individual taxpayers are expected to request the
refund, according to the IRS.

Individual taxpayers can request the refund by using the standard amounts,
which are based on the total number of exemptions claimed on the 2006
federal income tax return. Choosing the standard amount saves taxpayers the
time and trouble of digging through 41 months of old phone bills.

The standard amounts are $30 for a person filing a return with one
exemption, $40 for two exemptions, $50 for three exemptions and $60 for four
or more exemptions. For example, a married couple filing a joint return with
two dependent children (for a total of four exemptions) will be eligible for
the maximum standard amount of $60. To get the standard amount, eligible
individual taxpayers will fill out an additional line on their regular 2006
1040 return. (Line 71 on Form 1040; Line 42 on Form 1040A; Line 9 on Form
1040EZ.)

Alternatively, individual taxpayers who want to request a refund of the
actual amount of tax paid should figure that amount using Form 8913 and
report it on their income tax return. Businesses and tax-exempt
organizations can also request a refund under a different procedure detailed
by the IRS. Find more information in the IRS FAQ here.

While the federal telephone excise tax on long distance has met its end,
taxes on local calling services are still applicable. The only exception is
if local calling is bundled with long-distance and the contract does not
separately state the charge for the local telephone service, which applies
to many various landline and wireless plans, VoIP services and prepaid phone
cards.

The U.S. telephone excise tax was enacted first in 1898 to help fund the
Spanish-American war. Since then, the tax has been repealed and reinstated
several times, usually in connection to times of war.