Telephone Tax Refund

The IRS has decided to abandon the fight on an ongoing legal matter that has collected tax on long distance telephone services. Here is the exclusive.

The IRS Owes you money if you paid taxes long distance phone each of us pays for any long distance telephone service. More uses the service, plus start hunting best rates. Any choice, however, is always stuck to pay a federal tax bill. For those with phone bills long distances, this tax can add up quickly given the fact that an estimated three percent of your total bill.

The tax in question is known as the federal tax on long distance telephone services. It was created in 1898. Yes, this tax arose more than a hundred years. As you can image, some people started to wonder how a tax imposed in 1898 could possibly apply today, especially in view of promoting technology phone. Turns out it does not apply. Given the opportunity to discuss the situation, five courts of appeal have ruled the tax invalid.

After contemplating the situation, the IRS has decided not to challenge court decisions. Instead, it has voluntarily agreed to issue credits or refunds for taxes paid in the last three years. In particular, it may request a refund of all taxes paid since February 28, 2003 until the date the IRS stopped collecting.

To collect the refunds, the IRS will create a new table in all forms of presentation of the year 1040 to fiscal 2006. In practical terms, this means you can check a box and get a refund when you prepare your 2006 tax return in 2007. The IRS will pay interest on these funds.

It should be noted that restitution is applicable only for long-distance tax. You still have to pay local taxes and the refund does not apply to taxes levied by states and such. Still, any refund is a good return in my opinion.