Discussion:Irs telephone tax refund

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Discussion Forum Index --> Tax Questions --> Irs telephone tax refund


Kenl (talk|edits) said:

28 November 2006
the federal charges on telephone bills appear to include amounts that are not to be considered in calculating the amount of federal excise tax to be included for the refund and the telephone company was no help in isolating the charges to be used. Does anyone know the proper way of determining the taxes to be used when looking at a bill? Thank you.

KenL

AHH (talk|edits) said:

28 November 2006
I agree it's difficult to figure out the exact tax amount from the phone bills. I'm still puzzling over my bills. The IRS has released a formula(which means you still have to be able to read the bill) for calculating the refund for businesses and a standard amount for individuals based on the number of exemptions allowed to that taxpayer. Individuals will be easy. If and when I figure out the other, I'll share.

Deback (talk|edits) said:

28 November 2006
On the long-distance portion of the telephone bills, look for the "Taxes" section and then look for the line labeled "Federal" or "Federal tax" or "Federal excise tax." This is the amount you will add when going through the 41 months of bills from March 2003 through July 2006.

AHH (talk|edits) said:

28 November 2006
It is my understanding that the federal tax the phone companys charged was calculated on both long distant as well as local services, yet the amount was lumped together as one tax on the bill. If this refund is only for the long distant federal tax, then how do we break that out? I believe this is where the problem arises.

AHH (talk|edits) said:

28 November 2006
Think I figured this out.....Deback is correct to look for "Federal" under the "Taxes" section for the long distance charges only. Forget about the local portion of federal tax, which is listed separately under the basic monthly charges. You will need the bills from Feb 2003 thru July 2006. Rather than write the lengthy formula here, go to the irs.gov site, do a search for "telephone tax refund" and IR-2006-179 gives the formula as well as an example. Basically it's the federal tax percentage of the April 06 bill minus the tax percentage of the Sept 06 bill, and then multiply that percentage by the total of phone bills from Feb 03 thru July06. Hope this helps.

Deback (talk|edits) said:

28 November 2006
Yes, the refund is only based on the Federal tax paid on long-distance calls. The period is March 2003 through July 2006. The details about this refund are on the following IRS page:

http://www.irs.gov/newsroom/article/0,,id=161506,00.html

The IRS will refund to you the taxes on long-distance service billed to you for the period after Feb 28, 2003 and before Aug 1, 2006.

Deback (talk|edits) said:

28 November 2006
And these URLs:

http://www.irs.gov/newsroom/article/0,,id=161504,00.html

http://www.irs.gov/newsroom/article/0,,id=164305,00.html

http://www.irs.gov/newsroom/article/0,,id=164310,00.html

http://www.irs.gov/businesses/small/article/0,,id=160214,00.html

AHH (talk|edits) said:

29 November 2006
I stand corrected. The beginning period is in fact March 03. Sorry for that goof.

Solomon (talk|edits) said:

20 December 2006
IRS representative covered this topic quite well on last Taxtalktoday.com. Interesting to discover that a dependent is entitled to claim this refund but must have records and use Form 8913 - I think that is the form without looking. Finally, the standard refund credit is for those "without records" or that do not want to bother with them.

DZCPA (talk|edits) said:

21 December 2006
After looking at a few of the phone bills for some of my friends, the standard amount is more than their phone bill tax amount. Our office will use the standard alllowance.

Pre IRS....The standard amounts are based on the total number of exemptions claimed on the 2006 federal income tax return. The standard amounts are $30 for a person filing a return with one exemption, $40 for two exemptions, $50 for three exemptions and $60 for four or more exemptions. For example, a married couple filing a joint return with two dependent children (for a total of four exemptions) will be eligible for the maximum standard amount of $60.

“The easiest way for eligible taxpayers to get their money back is to use the standard amounts,” said IRS Commissioner Mark W. Everson. “These amounts save taxpayers from locating 41 months of old phone bills and analyzing these bills to determine the taxes paid. We believe the standard amounts are both reasonable and fair.”

If our clients want us to add up 41 bills, we will charge them MORE than the standard refund amount.

JR1 (talk|edits) said:

December 22, 2006
The problem is business. My largest client has 16 phone lines, imagine the bill! And the bills are to be attached in order to claim the credit, assuming you went to the trouble to compute it...! Imagine GM's phone bill. And to attach 15 months of them? Pull up the semi, you're gonna need more than one...

Www.cpa1.biz (talk|edits) said:

22 December 2006
I saw the form 8913 with instructions giving an estimate of how much time TP needs to get this ready. It said preparation time 12 HOURS...that aint happening...

Solomon (talk|edits) said:

22 December 2006
Options for Business and Exempts.

JR1 (talk|edits) said:

December 22, 2006
Thanks, Sol. Great link. So....wonder how many of us will just opt to take 2% of the biz phone expense as the credit? Or 1.5% for the timid?

Dennis (talk|edits) said:

22 December 2006
The tax was actually 3%. ♫

JR1 (talk|edits) said:

December 22, 2006
Yes, but there's a max credit of 2% for smaller employers, and 1% for larger...

Dennis (talk|edits) said:

22 December 2006
I thought that was just for formula purpose. Isn't there an option to claim actual tax paid? In any event my point was about being timid in taking "only" 2%.

JR1 (talk|edits) said:

December 22, 2006
Sol's link off the IRS site says the max credit for our clients is 2% regardless of actual tax paid.

Death&Taxes (talk|edits) said:

22 December 2006
I suppose the 1% they keep is a processing fee, or 'vig' as it is called downtown.

Marvinnasses (talk|edits) said:

23 December 2006
I think the IRS formula for business is flawed. Comparing the two

bills in 2006 to determine the percentage of excise tax on long distance calls works only if the proportion of long distance calls is the same in the two months.

Dennis (talk|edits) said:

23 December 2006
No, Marvin. There would only be a problem if there were no long distance calls in either month. (In which case you can pick a month in which there are.) What the calculation does is break out that portion of the federal tax applicable to long distance when the bill for bundled services muddies the water. Both multiplication and division are commutative functions. (x+y)z-yz=xz.

Kathie2257 (talk|edits) said:

9 February 2007
Hi. Dennis the amount allowable to individuals IF you want to go back the 41 months is 3% according to what the IRS has told me. The 1% and 2% are for businesses.

Also for AHH if the taxes on the bill are together for local and long distance then it is considered bundled, in which case the taxes for local were also charged the amount to be refund and would go under the bundled column on form 8913. This information is also available if you read everything on the subject at http://www.irs.gov and go to the section on the refund on their site.

Lwcpa (talk|edits) said:

22 February 2007
How do you compute the federal excise tax percentage for March 06 and Sept 06 if you telephone bill shows $0 federal tax on long distance charges for every month after 8/06?

Bell (talk|edits) said:

22 February 2007
Is anyone messing with trying to get this back on a Form 1041 for a deceased taxpayer's estate?

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