The IRS has released procedures for exempt organizations to estimate their federal telephone excise tax refunds. To request a refund, an EO must file Form 990-T, even if it does not have taxable income to report, and attach Form 8913.
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 long-distance federal excise taxes. It is available to anyone who paid long-distance taxes on landline, cell phone 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.
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 to you the taxes on long-distance service billed to you for the period after Feb 28, 2003 and before Aug 1, 2006. Taxpayers should request this refund next year when they file their 2006 tax returns.
See the following for more information:
* Telephone Tax Refunds: Questions and Answers for Businesses and Tax-Exempt Organizations
* IR-2006-137, IRS Announces Standard Amounts for Telphone Tax Refunds
* Telephone Tax Refund: Questions and Answers for Individuals
* IR-2006-82, Government to Stop Collecting Long-Distance Telephone Tax
* Notice, Communications Excise Tax; Toll Telephone Service