The IRS Owes You Funds If You Have Paid Extended Distance Telephone Taxes

Every single a single of us pays for some type of long distance telephone service. The far more you use the service, the far more you commence hunting for better rates. Whatever choice you make, nonetheless, you are constantly stuck paying a federal tax on the bill. For those of you with huge lengthy distance telephone bills, this tax can add up speedily given the reality it is calculated at three percent of your total bill.

The tax in query is identified as the federal excise tax on extended distance telephone service. It was produced in 1898. Yes, this tax arose effectively more than 1 hundred years ago. As you may well image, a couple of individuals started to wonder how a tax established in 1898 could possibly apply today, particularly given the advancement of telephone technologies. Turns out it doesnt apply! Given a chance to overview the situation, 5 appellate courts have ruled the tax invalid.

Immediately after contemplating the predicament, the IRS has decided not to challenge the legal rulings. Instead, it has voluntarily agreed to issue credits or refunds for the excise taxes paid the past three years. Particularly, you will be capable to claim a refund of all taxes paid from February 28, 2003 till the date the IRS stopped collecting them.

To gather the refunds, the IRS will produce a new box on all 1040 filing forms for the 2006 tax year. In practical terms, this implies you will be able to 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 ought to be noted the refund is applicable only to the lengthy distance excise tax. You still should pay regional service taxes and the refund does not apply to taxes collected by states and such. Still, any refund is an excellent refund in my opinion.

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