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The Internal Revenue Service reports more
than 10 million early filers did not request the one-time telephone
excise tax refund. In the first release of this year’s weekly
filing season statistics, about 30 percent of all taxpayers did not
request the telephone tax refund.
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.
To make the refund easier to figure, the
government established a standard refund amount, based on personal
exemptions, ranging from $30 to $60. If taxpayers have phone bills
and other records, they can request the actual amount of excise tax
paid. Though using the standard amount is optional, it is easy to
figure and approximates the eligible amount for most individual
taxpayers. Taxpayers only have to fill out one line on their
return, and they don’t need to present proof to the IRS.
In other statistics released by the IRS,
early filings show e-file returns are up nearly 3 percent and
e-filed returns prepared on home computers up 7 percent compared to
last year. Through Feb. 16, the average refund is $2,733, nearly
$100 above last year.
For people requesting the telephone tax
refund, it adds $30 to $60 — or even more — onto a
refund. The IRS wants to make it as easy as possible for anyone who
paid the tax to get this special refund. If you paid the tax and
haven’t filed yet, here are some tips to help you figure the
refund correctly and get it quickly:
File electronically. Electronic-filing
software flags often overlooked tax breaks and helps you figure
them accurately and report them properly. If you use a professional
tax preparer, ask that person to e-file your return.
Choose direct deposit. Whether you file
electronically or on paper, you can get your refund at least a week
sooner by having it deposited directly into your checking or
savings account.
Consider using the standard-refund amount
for the telephone-tax refund. Though using the standard amount is
optional, it is easy to figure and approximates the eligible amount
for most individual taxpayers. You only have to fill out one line
on your return, and you don’t need to present proof to the
IRS. The standard amount, ranging from $30 to $60, is based on the
number of exemptions you can claim on your return.
If you paid more than the standard amount,
you may figure your refund using the actual amount of tax shown on
your phone bills and other records. Base your refund request on the
three-percent federal tax paid, not the total phone bill. Do not
count tax paid on local-only service. You must have the phone bills
or other records adequate to support the amount you are requesting.
These documents should not be sent along with the refund request
but should be retained in case the IRS questions the amount
requested.
Do not file duplicate requests. If you
file a regular income-tax return, do not file Form 1040EZ-T.
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. If you want to take advantage of the earned
income tax credit for low and moderate income workers, the child
tax credit or other tax breaks, file a regular return and include
your telephone-tax refund request on that return.
Stay away from tax preparers who falsely
claim that many, if not most, phone customers can get hundreds of
dollars or more back under this program.
As always, when in doubt consult a trusted
professional to assist you.
• • •
This information is provided as a public
service and should not be construed as individual accounting or tax
planning advice. For information on how these general principles
apply to your situation, please consult an accounting or tax
professional.
Harry Rabb is a C.P.A. and owner of
Accounting Services, Inc., 935 Main Street, Suite D-1, Safety
Harbor. Call 727-725-4121.
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