Tax money still out there
September 12, 2007
Craig — Almost 30 percent of Colorado taxpayers have not requested this year’s one-time telephone excise tax refund, leaving more than $20 million on the table, according to an IRS press release.
As of Aug. 20, of the 2,253,000 Colorado returns filed, 672,000 did not request this refund.
Most phone customers, including most cell-phone users, qualify for the refund. The refund covers the 3-percent tax paid on long-distance and bundled service. It can add $30 to $60 – or even more – onto a taxpayer’s refund. So far this year, 92.1 million taxpayers, 71.6 percent of all individual tax return filers, have requested telephone tax refunds totaling $4 billion.
Eligible phone customers can request the refund on their 2006 income-tax return. This includes those who haven’t filed yet, those who obtained a tax-filing extension earlier this year or those who are not required to file a return.
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. The tax continues to apply to local-only phone service.
Federal officials also authorized a one-time refund of the three-percent tax collected on long-distance or bundled service billed after Feb. 28, 2003, and before Aug. 1, 2006. Bundled service is local and long-distance service provided under a plan that does not separately list the charge for local service.
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People who are not required to file a regular income-tax return can use a special short form – Form 1040EZ-T- to request the refund. Individuals with low income, including many senior citizens, may qualify to use this special form. If you are required to file but have not done so, don’t forget to request this refund when you do file your 2006 return.
If you already filed your return but failed to request the telephone-tax refund, you must file an amended return using Form 1040X. This form, available on IRS.gov, cannot be e-filed; it must be filed on paper.
Use the Telephone Excise Tax Refund section on the front page of IRS.gov. Here, you can download forms and find answers to frequently-asked questions.