IRS: Phone-tax repeal to net families $60
Officials detail plans for refunds after court rulings
The Internal Revenue Service said the repeal of a tax on long-distance telephone service will be worth at least $60 to a family of four.
The federal tax-collection agency yesterday disclosed the maximum refund taxpayers can claim without producing old telephone bills. The standard amount ranges from $30 for a single taxpayer to $60 for families that claim four or more exemptions on their tax return such as married couples with two children.
``The easiest way for eligible taxpayers to get their money back is to use the standard amounts," IRS Commissioner Mark Everson said. ``We believe the standard amounts are both reasonable and fair."
Then-Treasury Secretary John Snow said on May 25 that the government would stop collecting the 3 percent excise tax on long-distance telephone service. The government lost a series of court cases that ruled the 108-year-old tax created to fund the Spanish-American War didn't apply to modern technologies. The government stopped collecting the tax July 31.
Snow said in May that the government would refund about $13 billion in taxes paid on telephone bills over the past three years. The refunds are worth hundreds of thousands of dollars to businesses, though individual consumers who pay a dollar or two per month weren't told how they would claim their own refund.
Legal victories by companies such as Itasca, Illinois-based OfficeMax Inc., and Palo Alto, California-based Hewlett-Packard Co. helped spur the government's decision.
Long-distance carriers that had collected the tax and remitted it to the government had lobbied for the levy to be abolished.
The IRS's decision allows taxpayers to avoid combing through 41 months of telephone bills to arrive at a figure, Everson said.
To claim the standard amount, taxpayers only have to fill one additional line on their 2006 tax return to be filed beginning in January .
Individuals still may claim a refund for a precise figure if they produce old telephone bills.
Legislation has been introduced in Congress to repeal the 3 percent excise tax on local telephone service, which wasn't the subject of the lawsuits.
