My mom sent me this article about the IRS rescinding a more than 100-year old tax on "telegraphs and telephones." People will no longer have to pay a long distance tax and they can apply for a refund of all taxes paid since February 2003.
I'm guessing if you use Turbo Tax or Taxcut, this will be built in. The article can be found in the comments section.
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Get Your IRS Refund -- With Interest!
Gary North
After 108 years, a temporary wartime tax left over from the Spanish-American War has been declared illegal by several Federal courts, including the U.S. Court of Appeals Eleventh Circuit Court.
It's the telegraph tax.
It was extended to peacetime America. It was also extended to the telephone.
Don't you just love the tax system?
Here's the good news, straight from the IRS:
IR-2006-82, May 25, 2006
WASHINGTON -- The Internal Revenue Service today announced that it will stop collecting the federal excise tax on long-distance telephone service.
The tax on telephone services was first imposed in 1898. The current rate is 3% of the charges billed for these services. The IRS announcement follows decisions in five federal appeals courts holding that the tax does not apply to long-distance service as it is billed today.
Taxpayers will be eligible to file for refunds of all excise tax they have paid on long-distance service billed to them after Feb. 28, 2003. Interest will be paid on these refunds.
Taxpayers will claim this refund on their 2006 tax returns. In order to minimize burden, the IRS expects to announce soon a simplified method that individuals may use.
So taxpayers won't have to spend time digging through old telephone bills, we're designing a straightforward process that taxpayers may use when they file their tax returns next year, said IRS Commissioner Mark W. Everson. Claiming a refund will be simple and fair.
The IRS announcement does not affect the federal excise tax on local telephone service, which remains in effect. Likewise, various state and local taxes and fees paid by telephone customers are also unaffected.
More information can be found in IRS Notice 2006-50. It will also be published in Internal Revenue Bulletin 2006-25, dated June, 19, 2006.
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