Telephone Excise Tax Refund

The expected confusion around the Telephone Excise Tax Refund (TETR) is now in full swing. Millions of taxpayers are mis-filing the refund, some are attempting to claim they paid more in long-distance excise tax then they earned in income. Once again avoid the predatory practice of tax preparers who falsely claim you can receive “magical refunds”, these preparers are claiming that that many, if not most, phone customers can get hundreds of dollars or more back under this program.

The government stopped collecting the long-distance excise tax last August after several federal court decisions held that the tax does not apply to long-distance service as it is billed today and as a result the government authorized a one-time refund of the federal excise tax collected on service billed during the previous 41 months, stretching from the beginning of March 2003 to the end of July 2006.

Mistakes found by the IRS on a sample of 2006 returns filed during January include:

* Filling out the Form 1040EZ-T incorrectly by failing to show a refund amount on Line 1a.
* Failing to request the telephone tax refund on a regular federal income-tax return in situations where the taxpayer appears to qualify.
* Filing duplicate requests.
* Requesting a refund that appears to be based on the entire amount of the taxpayer’s phone bills, rather than just the three-percent tax on long-distance and bundled service.
* Requesting a refund in the thousands of dollars, suggesting that the taxpayer paid more for telephone service than they received in income.

Here is link to TETR info the IRS gov website that should help.

http://www.irs.gov/newsroom/article/0,,id=164032,00.html