Internal Revenue Service (IRS) Telephone Excise Tax Refund
Get Back the Money You’re Owed
What is the Telephone Excise Tax Refund? A one-time refund available to any business or tax-exempt organization that has paid tax on telephone long-distance service billed after Feb. 28, 2003 and before Aug. 1, 2006.
Who is Eligible?
• Businesses • Nonprofit organizations • Individual taxpayers
How Much Is the Refund? • Equal to the amount of federal excise tax paid; • An approximate amount based on a estimation method provided by IRS; or • A standard refund amount for individuals between $30 and $60 based on number of exemptions they claim
Why is the IRS Issuing a Refund?
Recently federal courts ruled that the federal excise tax is no longer applicable to the way long-distance service is billed today.
How Do Businesses and Tax-Exempt Organizations Get a Refund? • Use Form 8913 to request a refund of the actual amount of taxes paid after Feb. 28, 2003, and before Aug. 1, 2006, or an estimated refund amount. • Businesses attach Form 8913 to 2006 tax returns. • Tax-exempt organizations attach Form 8913 to Form 990-T.
How Do Sole Proprietors Get a Refund?
1. Sole proprietors who report a gross income of $25,000 or less on the Schedule C should request a standard or actual refund amount on their 2006 income tax return. 2. Sole proprietors who report a gross income of $25,000 or more on the Schedule C should request an actual or estimated amount using Form 8913.
IRS Estimated Refund Formula
• Compare two telephone bills from 2006 – one with a statement date in April 2006 and the bill with a statement date in September 2006. • Calculate the telephone tax as a percentage of the April 2006 bill (which included the excise tax for both local and long-distance service). • Do the same with the September 2006 bill (which only included the tax on local service).
• Apply the difference between the two percentages to quarterly or annual telephone expenses to determine the refund amount owed.
For more information on the telephone excise tax refund, visit IRS.gov or call the TeleTax line at 1-800-829-4477 and select Topic #611