WASHINGTON – Sen. Chuck Grassley, ranking member of the Committee on Finance, today urged taxpayers who have not yet filed their federal income taxes this year to claim their telephone tax refund.
"I was surprised to hear that a lot of taxpayers haven’t claimed the telephone tax refund so far," Grassley said. "Taxpayers are entitled to it, and they should consider claiming it."
The federal government is offering a one-time rebate on the 108-year-old federal excise tax on telephones. The Internal Revenue Service said almost one-third of taxpayers who have filed their taxes so far have not asked for the rebate, which is usually about $30 to $60.
Following are questions and questions from www.irs.gov.
Telephone Tax Refund Questions and Answers
Last updated March 26, 2007
What is the telephone tax refund?
The telephone tax refund is a one-time payment available on your 2006 federal income tax return, designed to refund previously collected federal excise taxes on long-distance or bundled service. It is available to anyone who paid such taxes on landline, wireless, or Voice over Internet Protocol (VoIP) service.
Why is the government refunding these taxes?
Several recent federal court decisions have held that the tax does not apply to long-distance service as it is billed today. The IRS is following these decisions and refunding the portion of the tax charged on long-distance calls. The IRS is also refunding taxes collected on telephone service under plans that do not differentiate between long distance and local calls including bundled service.
The telephone tax continues to apply to local-only service, and the IRS is not refunding taxes charged on local-only service.
The IRS will refund the taxes paid on long-distance or bundled service billed to taxpayers for the period after Feb. 28, 2003, and before Aug. 1, 2006. Taxpayers should request this refund when they file their 2006 tax returns.
Who is eligible to request the telephone tax refund?
In general, any individual, business or nonprofit organization that paid the tax for long distance or bundled service billed after Feb. 28, 2003, and before Aug. 1, 2006, is eligible to request the refund.