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Pepperdine University School of Law

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Friday, December 29, 2006

IRS Issues Rules for Telephone Excise Tax Refunds on 2006 Returns

The IRS yesterday issued Notice 2007-11, 2007-4 I.R.B. 1, which provides comprehensive guidance on how individuals and businesses can obtain refunds and credits on their 2006 returns of the long-distance telephone excise tax imposed by § 4251:

  • Individuals can either claim a standard amount ($30 (single) - $60 (married with two or more children) on Form 1040, or file a claim for the actual excise taxes paid between 3/1/03 - 7/31/06 on Form 8913, Credit for Federal Telephone Excise Tax Paid.
  • Businesses, Tax-Exempt Organizations, and Individuals Filing Schedules C, E, or F with Gross Receipts in Excess of $25,000 either may file a claim based on the actual excise tax paid for the past 41 months or may use a special formula to figure their refund based on two months of bills.

The IRS agreed to stop collecting the tax after several cases held the continued collection of the tax to be illegal:

For more information on the IRS web site, see:

http://taxprof.typepad.com/taxprof_blog/2006/12/irs_issues_rule.html

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