The Internal Revenue Service is hoping to make it easier for businesses to calculate their telephone tax refund, and is looking for executives to file suggestions within two weeks. Comments and suggestions for simplifying the refund process by creating a standardized deduction for businesses should be E-mailed to [email protected] The deadline for comment is September 15.
If a standard deduction estimation method is not found, business taxpayers will have to sift through and analyze 41 months of old phone records to apply for the refund.
In May, the Treasury Department gave up its fight to keep alive a federal excise tax on long-distance telephone service. As a result, the agency announced that in 2007 it would refund individual and business taxpayers who paid the long-distance tax on service billed after February 28, 2003, and before August 1, 2006.
At the time, IRS spokesman Sean Kevelighan noted that, in aggregate, refunds would total $13 billion. However, he told CFO.com that the IRS has not yet estimated how much of that total would go to corporate filers.
While the IRS has determined that individual taxpayers can use standard deductions (between $30 and $60) based on estimated usage patterns, businesses and nonprofit organizations are currently required to base their tax refund on the actual amount of tax paid, according to a bulletin released yesterday by the agency.
As a result, the IRS is exploring ways to estimate business usage. “Businesses and nonprofits generally have more varied usage patterns than individuals,” noted IRS commissioner Mark Everson in a statement. “We’ve met with a number of business and nonprofit groups to understand their concerns, and we plan to continue to work with them to come up with a reasonable method for estimating telephone excise tax refund amounts.”
Details about how to request the telephone tax refund will be included in all 2006 tax return materials and on the IRS Website.