A Tax Credit on 2006 Forms For Excise Taxes on Phone Calls-Truth!
Summary of eRumor:
The IRS is offering a tax credit on 2006 tax forms for money paid in excise taxes on telephone calls.
The Truth:
The eRumor is long, detailed, and complicated but it is true that on your tax forms for the 2006 tax year in the U.S. you can claim a tax credit because of a change in the collection of Federal excise taxes on telephone calls. This is because of federal court decisions ruling that the tax no longer applies to long distance calls the way they are billed today. It applies to land-line, cellular, and even Internet calls.
Here are some of the details:
-Excise taxes on long-distance telephone service was halted beginning August 1, 2006.
-Refunds are being offered to individuals, businesses, and non-profit organizations for excise taxes paid on long-distance service between February 28, 2003 and August 1, 2006.
-If you want to go to the trouble of actually assembling all the telephone bills for that period, you can do it and get a refund on the actual taxes you paid, but for convenience there is a simpler way to do it.
If you claim one exemption, the refund is $30
If you claim two exemptions, the refund is $40
If you claim three exemptions, the refund is $50
If you claim four exemptions or more, the refund is $60.
-You do not need to itemize deductions. The tax credit will be offered on all individual tax forms for 2006 taxes.
-For businesses and non-profits, the IRS has come up with a formula for a refund. Check with your tax preparer for details.
Historically, the long-distance excise tax was based on the time and distance of a call. But in the 1990s more telephone companies started charging for long-distance calls without regard to distance and court challenges argued that the tax should not longer be levied.