|
The IRS’ $13 billion 2007 Phone Tax Refund- It’s Real, But Don’t Steal
By
Dan Baldwin, TA Founder & Editor-at-Large, February 2007
Just when you thought Uncle Sam had turned into some free spending, tipsy
sailor on liberty call giving away $13 billion to America’s long suffering
telecom customers, the IRS plays the “audit” card. Damn the bad luck!
What’s all this “Federal Excise TAX” (FET) excitement/worry about anyway?
Glad you asked.
Scroll back the calendar 110 years to Washington DC and you’ll find a bunch of sensible politicos
deciding to finance the Spanish-American war by charging all the rich
American’s with those new-fangled phones a 3% surcharge for all their
phone calls. It was a lot of money back then and it’s still a lot of money
– seems they forgot to turn the tax off after that very short war ended.
Now fast forward to last May to see the US
government inexplicably revoke the 110 year old tax and even tell people
they can get a tax refund for whatever FET they’ve paid for the last 41
months. (Amazing what a couple hippie lawyers can get accomplished.)
So
how do you get your fair share of what’s supposedly a $13 billion dollar
pot of money? Step one, ask for it. Step two, don’t ask for too much. Your
tax accountant should be all up to speed on helping you maximize what
you’ve got coming. In general, consumers get about $50 or so and don’t
really have to prove it. Businesses do have to prove it and if they’ve got
proper documentation the refund can equal about one and a half times
whatever they spend on long distance every month. Businesses that spend
$10,000 a month on long distance can see a refund of $15,000. Hey, that’s
almost real money.
So
you’d think that any government money program that has the word “billion”
in it would produce a few charlatans (remember Katrina?) – and you’d be
right. (See the first news story below.) So what’s a long suffering
business telecom customer to do about their 2007 FET refund request?
Multiply your monthly long distance phone bill by 1.5 and ask your
accountant if asking for it will flag an audit. Damn these business
decisions!
If
you have the good fortune of being with a long distance phone company that
gives a damn about you and your business I’d call them up and have them
give you a statement that estimates your FET paid over the last 41 months.
The banks do it every year without even being asked, right? It’s worth a
try.
Good
luck & remember – TA's rooting for you!
Federal Excise Tax News Stories
IRS Moves to Stop Abusive Telephone Tax Refund Requests; Search Warrants
Target Tax Preparers in Seven Cities Nationwide Search warrants were
carried out in seven cities this week by special agents from the Internal
Revenue Service. According to affidavits filed in federal court, the IRS
is seeking evidence from tax-preparation businesses suspected of preparing
returns on behalf of clients requesting egregious amounts involving this
year’s special telephone excise tax refund. Media-Newswire.com 2/22/7
more
Feds cut off phone tax after 108 years A pesky, century-old tax on
your phone bill is finally being put to rest. The Treasury Department said
Thursday that it will no longer collect a 3% federal excise tax on
long-distance calls and would refund about $15 billion to taxpayers. USA
Today 5/26/6
more
US to repeal phone tax, refund billions The U.S. Treasury Department
on Thursday conceded a legal dispute over the 3 percent federal excise tax
on long-distance telephone service and said $13 billion would be refunded
to taxpayers. Reuters 5/25/6
more
Government to Stop Collecting Long-Distance Telephone Tax The Internal
Revenue Service today announced that it will stop collecting the federal
excise tax on long-distance telephone service. The tax on telephone
services was first imposed in 1898. The current rate is 3% of the charges
billed for these services. The IRS announcement follows decisions in five
federal appeals courts holding that the tax does not apply to
long-distance service as it is billed today. IRS 5/25/6
more
Links
I.R.S. Federal Excise Tax Information Page
U.S. Treasury Website Announcement 5/25/6
|
