Government to Stop Collecting Long-Distance Telephone Tax
IR-2006-82, May 25, 2006
http://www.irs.gov/newsroom/article/0,,id=157706,00.html
IR-2006-82, May 25, 2006
WASHINGTON — The Internal Revenue Service today announced that it
will stop collecting the 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.
“So taxpayers won’t have to spend time digging through old
telephone bills, we’re designing a straightforward process that
taxpayers may use when they file their tax returns next year,” said
IRS Commissioner Mark W. Everson. “Claiming a refund will be simple
and fair.”
The IRS announcement does not affect the federal excise tax on
local telephone service, which remains in effect. Likewise, various
state and local taxes and fees paid by telephone customers are also
unaffected.
More information can be found in IRS Notice 2006-50. It will also
be published in Internal Revenue Bulletin 2006-25, dated June, 19,
2006.