As tax season approaches it can feel as though Uncle Sam lives to take money. But every once in a while, he gives a little back.
As tax season approaches it can feel as though Uncle Sam lives to take money. But every once in a while, he gives a little back.
Businesses are eligible for a federal excise tax refund on their long-distance and bundled telephone services dated from March 1, 2003, through July 2006. Landline, wireless or voice-over IP long-distance services all qualify for refunds.
Haven’t heard of this before? That could be because this is a one-time refund that has to be claimed on 2006 income tax returns, says Scott Remington, a tax partner at the Portland office of Grant Thornton, an accounting, business and tax advisory firm.
“Unlike a lot of tax ideas,” he says, “this has more widespread applicability.”
Business entities such as corporations, trusts and nonprofits can request the telephone tax refund. Remington says the claims process is straightforward: Businesses can either sift through their records from the past 41 months or use a formula on the Internal Revenue Service website that can estimate the amount of refunds an organization is entitled to.
“At a minimum, if they have the resources, companies should adopt the shorter method,” says Remington.
No matter which process an organization chooses to use, Form 8913 must be completed or a company risks losing out on this refund opportunity. Companies should include the form with their filed 2006 return. The IRS estimates about $10 billion in phone tax refunds will be made by the end of the tax season.
For more information and to find Form 8913, go to the IRS website at http://www.irs.gov/newsroom.
— Colleen Moran
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