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Overview
The telephone excise tax refund is a one-time payment that eligible taxpayers can request on their 2006 federal income tax returns. The refund gives back long-distance federal excise taxes paid in previous years.
Specifically, if you paid long distance charges on a land line, cell phone, or Voice over Internet Protocol (VoIP) service, for which you received a bill at any time after Feb. 28, 2003, and before August 1, 2006, you most likely paid the telephone excise tax and are eligible to request a refund. The refund is the result of recent federal court decisions that held that the 3-percent tax, which was first imposed in 1898, no longer applies to long-distance service as it is billed today. In addition, the IRS will refund all telephone excise taxes collected under “bundled” telephone service plans – i.e. plans that do not differentiate charges between local and long-distance calls.
Individuals who are not obligated to file a regular income-tax return, such as low-income and elderly taxpayers, may request a refund by filling out the new Form 1040EZ-T, which was created exclusively for this purpose.
Rather than requiring taxpayers to dig through 41 months of telephone bills to request the refund, the IRS is offering standard refund amounts ranging from $30 to $60, based on the number of exemptions claimed. These amounts, established from actual telephone usage data collected by the telephone industry and reflect the average long-distance tax paid in households of varying sizes. This data led to the decision to create a scaled refund structure based on the number of exemptions claimed on individual 2006 tax returns or Form 1040EZ-T.
Some taxpayers may find it more advantageous to request a refund using the actual amount of tax paid. They can do so by filling out Form 8913 and attaching it to their tax returns or Form 1040EZ-Ts.
For questions about the telephone excise tax refund, refer to the Frequently Asked Questions section of this electronic toolkit, or visit IRS.gov.
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