Washington,
May 25 -
Congressman Jim Gerlach released the following statement today after the U.S. Treasury Department reveled that it would end its legal dispute over the federal excise tax on long-distance telephone service. The announcement means U.S. taxpayers will be eligible for a refund when they file their 2006 taxes.
“What we’re talking about here is repealing a tax put in place when telephones weren’t as prevalent as they are today and when long-distance calling was extremely rare. This is a needed adjustment and this tax should have been repealed a long time ago. Numerous U.S. Appellate courts have made it clear that this tax is uncollectible. It’s time to give the taxpayers back their money,” Congressman Gerlach said.
According to the U.S. Treasury Department, the Department of Justice will no longer pursue litigation and the Internal Revenue Service (IRS) will issue refunds of tax on long-distance service for the past three years. The Department estimates upward of $15 billion will be returned to U.S. taxpayers as a result of this announcement.
Some Key Facts Regarding the Tax Refunds, courtesy of the U.S. Treasury Department:
· No immediate action is required by taxpayers.
· Refunds will be a part of 2006 tax returns filed in 2007.
· Refund claims will cover all excise tax paid on long-distance service over the last three years (time allowed given statute of limitations). Interest will be paid on refunds.
· The IRS is working on a simplified method for individuals to use to claim a refund on their 2006 tax returns.
· Refunds will not include tax paid on local telephone service, which was not involved in the litigation.
· Originally established in 1898 as a “luxury” tax on wealthy Americans who owned telephones, the federal excise tax on telephone calls is not compatible with today’s modern information-age society.
