WASHINGTON -
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.
Taxpayers will be eligible to file for refunds of all excise tax they have paid on long-distance service billed to them after Feb. 28, 2003. Interest will be paid on these refunds.
Taxpayers will claim this refund on their 2006 tax returns. In order to minimize burden, the IRS expects to announce soon a simplified method that individuals may use.
�So taxpayers won�t have to spend time digging through old telephone bills, we�re designing a straightforward process that taxpayers may use when they file their tax returns next year,� said IRS Commissioner Mark W. Everson. �Claiming a refund will be simple and fair.�
The IRS announcement does not affect the federal excise tax on local telephone service, which remains in effect. Likewise, various state and local taxes and fees paid by telephone customers are also unaffected.
More information can be found in IRS Notice 2006-50. It will also be published in Internal Revenue Bulletin 2006-25, dated June, 19, 2006.
Related Links:
- Form 8913, Credit for Federal Telephone Excise Tax Paid
- Instructions for Form 8913, Credit for Federal Telephone Excise Tax Paid
- 1040EZ-T, Request for Refund of Federal Telephone Excise Tax
- IR-2007-52, Free File Available for Requesting Telephone Tax Refund
- FS-2007-12, Tax Return Preparer Fraud
- IR-2007-40, 10 Million Taxpayers Miss Out on Telephone Tax Refunds; IRS Urges People to Check before Filing
- IR-2007-37, Fraudulent Telephone Tax Refunds, Abusive Roth IRAs Top Off 2007 �Dirty Dozen� Tax Scams
- IR-2007-36, IRS Moves to Stop Abusive Telephone Tax Refund Requests; Search Warrants Target Tax Preparers in Seven Cities Nationwide
- IR-2007-27, IRS Moves to Prevent Telephone Tax Refund Abuse; Help Taxpayers Make Accurate Requests
- IR-2007-21, Mistakes Abound on Telephone-Tax Refund Requests; IRS Offers Tips for Getting a Speedy Refund
- IR-2007-16, Some Telephone Tax Refund Requests May Be Too High; IRS Will Deny Improper Requests
- Telephone Tax Refunds: Questions and Answers for Businesses and Tax-Exempt Organizations
- Telephone Tax Refund: Questions and Answers for Individuals
- Telephone Excise Tax Refund
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- IR-2006-179, Businesses and Tax-Exempts Can Use Formula for Telephone Tax Refund
- IR-2006-137, IRS Announces Standard Amounts for Telphone Tax Refunds
- Notice 2006-50, Communications Excise Tax; Toll Telephone Service
- Treasury Department News Release