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 services. It is available to anyone who paid such taxes on landline, wireless, or Voice over Internet Protocol (VoIP) service.
Why is the government refunding these taxes?
Several recent federal court decisions have held that the tax does not apply to long-distance service as it is billed today. The IRS is following these decisions and refunding the portion of the tax charged on long-distance calls. The IRS is also refunding taxes collected on telephone service under plans that do not differentiate between long distance and local calls including bundled service.
The telephone tax continues to apply to local-only service, and the IRS is not refunding taxes charged on local-only service.
The IRS will refund to you the taxes on long-distance or bundled service billed to you for the period after Feb. 28, 2003 and before Aug. 1, 2006. Taxpayers should request this refund when they file their 2006 tax returns.
It’s not much, but definitely do make sure you get yours.