Tips for Requesting Telephone Excise Tax Refunds

The Internal Revenue Service offered taxpayers tips for requesting the telephone excise tax refund, after early tax returns show some people are making basic mistakes, others are requesting excessive refunds and many are missing out on the refunds, altogether.

"We encourage taxpayers to take a few minutes and review the details of the telephone-tax refund," said IRS Commissioner Mark W. Everson. "A little extra time will reduce the chance for a mistake, avoid a refund delay and possibly add a few dollars onto refund checks."

The government stopped collecting the long-distance excise tax last August after several federal court decisions held that the tax does not apply to long-distance service as it is billed today. Federal officials also authorized a one-time refund of the federal excise tax collected on service billed during the previous 41 months, stretching from the beginning of March 2003 to the end of July 2006. The tax continues to apply to local-only phone service.

Early mistakes found on a sample of 2006 returns filed during January include:

• Filling out the Form 1040EZ-T, Request for Refund of Federal Telephone Excise Tax, incorrectly by failing to show a refund amount on Line 1a. Designed exclusively for requesting the telephone-tax refund, this simple form is for people who don't need to file a regular income-tax return. Filing an incomplete form typically delays a refund and often leads to follow-up correspondence with the IRS. More than 10 million low-income people, many of them senior citizens, are expected to file this form.

• Failing to request the telephone tax refund on a regular federal income-tax return in situations where the taxpayer appears to qualify. More than one-third of early filers did not request the telephone tax refund. This includes filers on Forms 1040, 1040A, 1040EZ, 1040NR and 1040NR-EZ. About 136 million individuals and couples are expected to file one of these forms, and most will, likely, qualify for the telephone-tax refund. Anyone who files one of these forms cannot file Form 1040EZ-T.

• Filing duplicate requests. Usually, this involves filing both Form 1040EZ-T and a regular income-tax return. Anyone who files a regular return cannot file Form 1040EZ-T. Doing so will delay any refund for months and result in a phone call or letter from the IRS.

• Requesting a refund that appears to be based on the entire amount of the taxpayer's phone bills, rather than just the three-percent tax on long-distance and bundled service.

• Requesting a refund in the thousands of dollars, suggesting that the taxpayer paid more for telephone service than they received in income.

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Richard Kavanaugh , 07 February 2007 @ 16:26 PM  Married Couples Should Submit 2 separate 1040EZ-T's Married couples whose income qualifies them for the 1040EZ-T can, in most cases, file 2 separate EZ-T's, or 2 MFS 1040's. This will get them $30 each, rather than $40. Dick, FL