Treasury Announces End to Long-Distance Telephone Excise Tax

Taxpayers will be able to apply for refunds on their 2006 tax forms, to be filed in 2007.

Key Facts Regarding Tax Refunds:

• 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 telphone calls is not compatible with today's modern information-age society.