Thursday, February 08, 2007

The Telephone Tax Refund: Take It, but Tread Lightly (unless you have the receipts)

To ensure that tax preparers do not abuse the telephone tax credit, IRS Revenue Agents and [Criminal] Special Agents have taken the unusual step of visiting 22 tax preparers. The IRS has a table of standard credits ($30-60) which it believes will apply to most taxpayers for the March 2003--July 2006 period in question. You can claim more, but you best be prepared to document the additional amounts. Very large claims (some have claimed in excess of $10,000) probably will have any refund frozen and increase the likelihood on an audit. While all this is going on, the IRS is also announcing the credit after one-third of early filers overlooked the credit.

Obviously, a lot of confusion going on here. If you do your return by hand or by tax software, double-check to make sure that you took the credit (the tax relates to long-distance service). One final question--wonder how the IRS agents sent to the tax preparers were received?

2 Comments:

Blogger Stacia said...

"If you do your return by hand or by tax software, double-check to make sure that you took the credit (unless you only had cell service--the tax relates to local service)."

I thought the tax related to long-distance service, & for me, that meant the only way to take it (without going the standard route) was with my cellphone bills. On the IRS page it says:

"The telephone tax refund is a one-time payment available on your 2006 federal income tax return, designed to refund previously collected federal excise taxes on long-distance or bundled service. It is available to anyone who paid such taxes on landline, wireless, or Voice over Internet Protocol (VoIP) service."
http://www.irs.gov/newsroom/article/0,,id=161506,00.html

I personally found that using my cellphone bills resulted in a credit that was twice as much as the standard credit, but maybe I just pay more than the average person does for my cellphone.

9:36 AM  
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