Released: September 01, 2006

Tax filers can claim refund on phone excise tax

Source: By Kathleen Day, Washington Post (Free Registration)

Individual taxpayers will be able to claim a refund of up to $60 on their 2006 federal returns as the government attempts to give back $8 billion in long-distance telephone taxes that courts have ruled should not have been collected.

The Internal Revenue Service yesterday announced refunds that vary by how many dependents a tax filer claims. In May, after losing a series of federal court cases, the IRS said it would no longer collect the 3 percent tax - first imposed in 1898 to fund the Spanish-American War - and ordered telephone companies to stop charging it by Aug. 1.

Individuals will be eligible for a refund of the long-distance tax billed for any phone service - cell, fax, computer or land-line - in the 41-month period from Feb. 28, 2003, through July 31, 2006. Taxpayers can claim a maximum refund of $60 with no questions asked, meaning they don’t have to produce copies of phone bills to get money back.

For the 2006 return, a person filing a return with one exemption can claim $30; two exemptions, $40; three exemptions, $50; and four or more exemptions, $60. The agency cited this example: A married couple filing a joint return with two dependent children, for a total of four exemptions, would be eligible for the maximum amount of $60. A line for the refund will appear in the 2006 federal tax return.

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