Simple Tax Refund Most Aren’t Claiming

Source: Market Watch

It’s perhaps the easiest $30 to $60 you’ll ever collect from the IRS, but more than one-third of early-bird tax filers failed to claim the telephone excise tax refund, available this year to just about any taxpayer who paid for long-distance telephone service in recent years, the IRS said Wednesday.

“A little more than one-in-three returns are omitting the telephone tax refund,” said Eric Smith, an IRS spokesman.  Some of those taxpayers are correct in not claiming the refund if they didn’t pay for long-distance telephone service. But plenty of taxpayers who aren’t claiming the refund are “omitting it in error,” Smith said.

The refund is available this year only, and came about after court decisions found the excise tax, first levied in 1898 to fund the Spanish-American War, should no longer apply to telephone service as it’s billed today. Taxpayers can claim a refund based on the 3% excise tax they paid on long-distance calls from March 2003 through July 2006.

You can add up all that federal excise tax you paid based on your old phone records, or you can take the easy route by taking a standard refund amount, based on the number of personal exemptions you claim. If you claim one exemption, you can claim a $30 refund; two exemptions, $40; three exemptions, $50; and four exemptions, $60. On Form 1040, you claim the refund on Line 71.

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