Some Tax Justice?

[Gunslinger]

Ok so I got this email from my First Sgt today and at first I thought it was just a chain/spam mail but there's an actual CNN article about it.  Has anyone else hear this?  If true this is awsome considering this tax was put in place to pay for the spanish American war and technology makes it rather obsolete.  not to mention cool if we all get a rebate from it.....every little bit helps.  Hope this wasn't a repost.

Treasury: Telephone tax refund for everyone
Treasury Dept. concedes a Spanish-American War tax on long-distance service is antiquated and consumers are entitled to a refund.
May 25, 2006: 4:03 PM EDT


NEW YORK (CNNMoney.com) - After losing several court battles, the U.S. Treasury on Thursday said it would provide refunds to consumers for a federal excise "luxury" tax on long-distance service, the origins of which date back to 1898 to help pay for the Spanish-American War.

The refund will apply to the 3 percent excise tax billed to them on long-distance service since Feb. 28, 2003 and will include interest. Consumers will be able to claim it on their 2006 tax returns, which they will file in 2007.

"Today is a good day for American taxpayers; it marks the beginning of the end of an outdated , antiquated tax that has survived a century beyond its original purpose, and by now should have been ancient history," said Treasury Secretary John Snow in a statement.

"The Federal Appeals courts have spoken across the board. It's time to 'disconnect' this tax and put it on the permanent 'do not call' list," Snow added.

The tax was passed in 1898, when there was no federal income tax and telephone service was something that only the rich had access to. It was designed as a luxury tax to help the government during a time of high military spending.

Since then, it has become a good revenue generator for the Treasury, raising $5.9 billion in 2005.

An excise tax is also levied on local service, but that will not be refunded. However, both Snow and Senate Finance Committee Chairman Charles Grassley (R-Iowa) said Thursday they would like lawmakers to abolish the excise tax in its entirety.
http://money.cnn.com/2006/05/25/news/telephonetax_refund/index.htm

[Airscrew]

Well my wife works for the Teasury Dept,  IRS Tax lawyers,  she hasnt heard about this so she had no clue,..
did a little searching

http://www.irs.gov/newsroom/article/0,,id=157706,00.html
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.

http://www.irs.gov/newsroom/article/0,,id=161504,00.html
IR-2006-137, Aug. 31, 2006


WASHINGTON — The Internal Revenue Service today announced the standard amounts that most long-distance customers can use to figure their telephone tax refund. These amounts, which range from $30 to $60, will enable millions of individual taxpayers to request the telephone tax refund without having to dig through old phone bills.

[Gunslinger]

This is some of the content of the actual email.  

When it comes time to prepare and file your 2006 tax return, make sure you don't overlook the "federal excise tax refund credit." You claim the credit on line 71 of your form 1040. A similar line will be available if you file the short form 1040A. If you have family or friends who no longer file a tax return AND they have their own land phone in their home and have been
paying a phone bill for years, make sure they know about this form 1040EZ-T.

What is this all about? Well the federal excise tax has been charge to you on your phone bill for years. It is an old tax that was assessed on your toll calls based on how far the call was being made and how much time you talked on that call. When phone companies began to offer flat fee phone service, challenges to the excise tax ended up in federal courts in several
districts of the country. The challenges pointed out that flat fee/rate phone service had nothing to do with the distance and the length of the phone call. Therefore, the excise tax should/could not be assessed.

The IRS has now conceded this argument. Phone companies have been given notice to stop assessing the federal excise tax as of Aug 30, 2006. You will most likely see the tax on your September cutoff statement, but it should NOT be on your October bill.

But the challengers of the old law also demanded restitution. So the IRS has announced that a one time credit will be available when you and I file our 2006 tax return as I explained above. However, the IRS also established limits on how BIG a credit you can get. Here's how it works.

If you file your return as a single person with just you as a dependent,
you get to claim a $30 credit on line 71 of your 1040.

If you file with a child or a parent as your dependent, you claim $40.

If you file your return as a married couple with no children ,you claim $40.

If you file as m arried with children, you claim $50 if one child, $60 If two children.

In all cases, the most you get to claim is $60 - UNLESS you have all Your phone bills starting AFTER Feb 28, 2003 through July 31, 2006 (do not use any bills starting Aug 1, 2006.), then you can add up the ACTUAL TAX AS IT APPEARS ON YOUR BILLS AND CLAIM THAT FOR A CREDIT.

Now if you have your actual phone bills and come up with an ACTUAL TAX AMOUNT, you cannot use line 71 on your tax return. You have to complete a special form number 8913 and attach it to your tax return.

Individuals using the special from 1040EZ-T will have to attach this form 8913 also.

One final point - this credit is a refundable credit. That means you get this money, no matter how your tax return works out. If you would end up owing the IRS a balance, the refund will reduce that balance you owe. If you end up getting a refund, the credit will be added and you get a bigger refund by that $30 to $60, depending on how many dependents are on your return.

I did a quick snopes and found nothing there.

[Airscrew]

I think we've been took.  I've been paying this tax myself since 1979, so my average long distance bill was about $20.00 a month, 3% is .60 per month, x 288 months (just to average out the months) is $172 then figure out the interest (I was never good at that) besides at what interest rate 2%?
anyway i think $30-60 refund is a bit short they probably owed us more but then $60 is still better that a hot stick in the eye

[Airscrew]

Guns, check the links I have in my first post, those are directly from the IRS, splains it all.

[Maverick]

What tax will they implement to replace the 5.9 billion?

[Chairboy]

Why do they need to replace it?  What is this fixation with giving the government lots of money?

[DiabloTX]

$40 is almost two tanks of gas for Miss Melba.  I'll take it!!!

[Maverick]

Originally posted by Chairboy
Why do they need to replace it?  What is this fixation with giving the government lots of money?

The "fixation" (your term not mine) is that once the govt. gets a set of income it tends to need to maintain it or haven't you been paying attention.

Now please do not assume that I posted that to indicate I like paying taxes. I don't but I do understand that the govt. has to pay for things and services. Until it can be run by bake sales I don't think taxes will be going away.