The Long-Distance Telephone Excise Tax is Dead!

Posted on 26. May, 2006 by in Taxes

phone_closeup.jpgNot to long ago I wrote about how the Treasury Department was having a tough time fighting off the litigation surrounding the silly telephone excise tax everyone pays for no reason. Today, however, the IRS and treasury announced that the long-distance telephone excise tax is indeed dead! Taxpayers will be able to apply for refunds on their 2006 tax forms, to be filed in 2007.

Treasury Secretary John Snow stated:

“Today is a good day for American taxpayers; it marks the beginning of the end of an outdated, antiquated tax that has survived a century beyond its original purpose, and by now should have been ancient history… The Federal Appeals courts have spoken across the board. It’s time to `disconnect’ this tax and put it on the permanent `do not call’ list… In addition to ending the litigation, I would like to call on Congress to terminate the remainder of this antique tax by repealing the excise tax on local service as well.”

Here are some of the details regarding the tax refunds:

  • No immediate action is required by taxpayers.
  • Refunds will be a part of 2006 tax returns filed in 2007.
  • Refund claims will cover all excise tax paid on long-distance service over the last three years (time allowed given statute of limitations). Interest will be paid on refunds.
  • The IRS is working on a simplified method for individuals to use to claim a refund on their 2006 tax returns.
  • Refunds will not include tax paid on local telephone service, which was not involved in the litigation.
  • Originally established in 1898 as a “luxury” tax on wealthy Americans who owned telephones, the federal excise tax on telephone calls is not compatible with today’s modern information-age society.
  • One Response to “The Long-Distance Telephone Excise Tax is Dead!”

    1. jim

      26. May, 2006

      I’m curious what the “safe harbor” amount is going to be…

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