Meena: Like to talk on the phone? IRS says: Thanks, and here’s $30 Print E-mail


I know, I know — the idea of free money from the government sounds too good to be true, but this year, it's the truth.

photo

Last summer when Uncle Sam decided to stop charging a 3 percent federal tax on long-distance phone calls, he paved the way for about $15 billion in refunds. For anyone who's ever had a landline, wireless or voice over Internet (VOIP) service, that could mean at least $30 more when the tax refund fairy comes.

The Telephone Excise Tax Refund is a one-time return of previously collected long-distance phone taxes. If you're an individual, business or tax-exempt organization, it's yours, even if you've never saved a phone bill in your life. You never even have to prove you had phone service.

If you're like me and haven't seen a printed phone bill in the past two years, you can claim the “standard refund,” a government estimate of what you likely paid in taxes. If you claim one exemption on your taxes, that amount is $30. If you claim two, three or four exemptions, it is $40, $50 or $60, respectively. The figures are based on analyses of historical telephone-usage data and household sizes.

If you're a packrat with a file of old phone bills, you can claim exactly what you paid in federal long-distance excise taxes by sending in old statements and filling out a special form.

Taking the standard refund requires filling out only one additional line on a tax return.

I haven't yet done my taxes, but when I do, I'll be taking the standard refund.

I'm expecting $30 dollars, which I'll likely spend on another pair of shoes, a cute new top or a fun night out. I could use the money to pay my Internet service bill, but when I can afford it, I prefer to treat myself when spending pleasant cash surprises like this one.

With the IRS offering about 160 million cash surprises this year, I'm amazed that more than 10 million people have turned down the offer. Of those, almost half — 4.8 million — hired professional tax preparers.

Of course, several professional tax preparers have gotten a recent talking to by the IRS for helping people request ridiculously high refunds. Unless you've paid more than $1 million for long-distance phone service, trying to claim you paid $30,000 federal excise taxes is a no-no.

So is trying to claim the refund for each of the past 50 years. Because of a statute of limitations, you can only expect refunds for taxes paid between March 2003 and July 2006.

If all of this talk about phone tax refunds gets you looking more closely at your phone bills, don't think you're getting scammed when you see an excise tax is still there. The government still collects the tax — instituted in 1898 to help fund the Spanish-American War — on local phone service.

 
< Prev   Next >


ClickitSA 160x600