The Internal Revenue Service (IRS) has announced the amounts that most long-distance customers can use to figure their telephone tax refund. The amounts, which range from $30 to $60, will enable millions of individual taxpayers who paid the long-distance telephone tax, to request a refund on their 2006 federal income tax return without having to dig through old phone bills.
“The easiest way for eligible taxpayers to get their money back is to use the standard amounts," said IRS Commissioner Mark W. Everson. “These amounts save taxpayers from locating 41 months of old phone bills and analyzing these bills to determine the taxes paid. We believe the standard amounts are both reasonable and fair.”
The standard amounts are based on actual telephone usage data and the total number of exemptions claimed on the 2006 federal income tax return. The standard amount applicable to a family or other household unit, reflects the long-distance phone tax paid by similarly sized families or households. For example, a married couple filing a joint return, with two dependent children (a total of four exemptions), will be eligible for the maximum standard amount of $60. Standard refund amounts for households include:
- $30 with one exemption
- $40 with two exemptions
- $50 with three exemptions
- $60 with four exemptions.
Those who paid the long-distance tax on landline, cell phone or Voice-over-Internet-Protocol (VoIP) services billed after February 28, 2003, and before August 1, 2006, are eligible for the refund. To get the standard amount, eligible taxpayers only need to fill out one additional line on their regular 2006 return. The IRS is creating a special short form, Form 1040EZ-T, for those who don’t need to file a regular return.
Taxpayers may also choose to figure their refund using the actual amount of tax paid. To choose this option, taxpayers should fill out Form 8913 and attach it to their regular income tax returns. Federal excise taxes paid on long-distance landline, cell phone or VoIP services are eligible for the refunds, however, taxes paid on local-only service, federal access changes, and state or local taxes and charges are not eligible for the refund. In general, federal excise taxes paid on other types of service do qualify.
“Businesses and nonprofits generally have more varied usage patterns than individuals do,” Everson said. “We’ve met with a number of businesses and nonprofit groups to understand their concerns, and we plan to continue to work with them to come up with a reasonable method for estimating telephone excise tax refunds.”
Standard amounts are not available for businesses and nonprofit organizations which must base their telephone tax refund on the actual amount of tax paid. The IRS is looking for ways to make the refund process easier for these taxpayers. The IRS is considering an estimation method businesses and nonprofits may use for figuring the tax paid.
Economists at the U.S. Department of the Treasury estimate the amount refunded to individuals will be about $10 million.