IRS Highlights Telephone Excise Tax Mistakes in Early Returns

The IRS yesterday (IR-2007-21) provided taxpayers with tips for requesting the telephone excise tax refund:

[E]arly tax returns show some people are making basic mistakes, others are requesting excessive refunds and many are missing out on the refunds, altogether. ... Early mistakes found on a sample of 2006 returns filed during January include:

• Filling out the Form 1040EZ-T, Request for Refund of Federal Telephone Excise Tax, 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. More than one-third of early filers did not request the telephone tax refund
• Filing duplicate requests. Usually, this involves filing both Form 1040EZ-T and a regular income-tax return. Anyone who files a regular return cannot file Form 1040EZ-T.
• 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.