According to a new press release from the IRS, US Government to Stop Collecting Long-Distance Telephone Tax, it looks like the IRS will stop collecting the 3% federal excise tax on long distance telephone service.
The tax on telephone services was first imposed in 1898. The current rate is 3% of the charges billed for these services. The IRS announcement follows decisions in five federal appeals courts holding that the tax does not apply to long-distance service as it is billed today.
Taxpayers will be eligible to file for refunds of all excise tax they have paid on long-distance service billed to them after Feb. 28, 2003. Interest will be paid on these refunds.
Taxpayers will claim this refund on their 2006 tax returns. In order to minimize burden, the IRS expects to announce soon a simplified method that individuals may use.
According to the report, the IRS doesn’t want people trying to find all their old telephone bills, so they have come up with a new “simple and fair” process to help you make your claim. So stay tuned and put this on your calendar to check before those 2006 US taxes become due.
I know a few people who are still using dial-up, and dialing long distance numbers to connect to the Internet, so this will be a big reward for them. As a reminder to those still using dial-up, AOL and others providing dial-up Internet connections and services are raising their prices in an attempt to force people to get off their land lines and onto DSL or cable.
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