Telephone Tax Refunds

As mentioned earlier, 2006 saw the end of the Spanish-American War (of 1898)…well, the funding for the war. The telephone excise tax, a “luxury” tax, has ended for most services. Taxpayers will receive refunds with their 2007 tax returns.

The IRS has computed standard amounts for the refunds, based on the number of exemptions on the tax return. You can choose the standard amount (between $30 and $60 dollars) or the actual amount (which will require you gathering phone bills from February 28, 2003 through July 31, 2006). The IRS has an excellent question and answer page. But here are some answers to other questions:

How do businesses get the refund? Businesses will have to figure the actual amount of tax paid, and complete a new IRS Form, Form 8913. Individuals who wish to receive the actual amount paid in tax will also complete this form.

I was charged this tax on my local service, my long distance, my cellular, and my Internet phone service. Which phone services are eligible for the refund? Courts held that whern the tax was based on transmission time, rather than distance, the tax was invalid. This means that the tax applies today only to local telephone service. The tax will be refunded for all other services where it was charged.

Why the specific dates (February 28, 2003 – July 31, 2006)? The Internal Revenue Code has a statute of limitations; the government only has to refund the money that was collected during this time-frame.

I’m still being charged the tax on my long-distance service. What should I do? Call your carrier and complain, and demand an immediate refund of the illegal tax. Then write your Public Utilities Commission and/or the FCC (Federal Communications Commission).

I don’t have to file a tax return this year. How do I collect the refund?
The IRS announced that there will be a special tax form, Form 1040-EZ-T, for such individuals.

It really took 108 years for the government to stop funding the Spanish-American War? Unfortunately, the telephone excise tax continues on local phone service, so we’re still paying to “Remember the Maine!”


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