Saturday, January 13, 2007

Tax Refund on Federal Long-Distance Tax

Individuals, businesses and nonprofits are eligible for a refund of previously-paid tax on phone bills on their 2006 tax returns.
See the IRS for more information:,,id=161506,00.html

I don’t have to file an income-tax return. How do I get the telephone tax refund? For those people who do not otherwise have to file a tax return, there is a new simple form (1040EZ-T) that can be used to get this refund. Beginning in mid-January, this form can also be filed electronically for free via the Free File link this Web site. If you choose the standard amount, all you need to do is fill out this simple form using the number of exemptions you are eligible to claim. For example, a married couple with two dependent children (for a total of four exemptions) will be eligible for the maximum standard amount of $60.

What is the standard refund amount? Individual taxpayers can take a standard amount from $30 to $60 based on the number of exemptions claimed on their tax return. For those claiming one exemption, the standard refund amount is $30, with an additonal $10 for each additional exemption up to 4.

What is the total amount the government expects to refund? Economists at the U.S. Department of the Treasury estimate the amount refunded to individuals will be about $10 billion.

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 including bundled service. The telephone tax continues to apply to local-only service, and the IRS is not refunding taxes charged on local-only service.

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