Dial up refunds for your long-distance phone calls — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Dial up refunds for your long-distance phone calls

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The feds have finally thrown in the towel: After suffering a string of losses in the appellate courts, the IRS concedes that long-distance phone services aren’t subject to federal excise tax. (IRS Notice 2006-50)

As a result, individual and business taxpayers can file for refunds or credits on their 2006 tax returns.

Strategy: Hold on to your telephone bills.Although the IRS is developing a “safe harbor”method for individuals, including self-employed taxpayers, it will be lower than the actual tax you’ve paid. If you have the proof, you can demand a refund or a credit for the higher amount.

Here’s the whole story: The excise tax on long-distance services—currently 3 percent—first appeared in 1897 to help finance the Spanish-American War. Now, the IRS says it will issue credits or refunds, plus interest, of excise taxes paid on long-distance services billed between Feb.28, 2003, and Aug. 1, 2006.

Under its new notice, the IRS...(register to read more)

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