Claiming Your Federal Excise Tax Refund

You may have noticed that you haven't been billed the Federal Excise Tax on Long Distance since July of 2006. That's because after years of appeals, the U.S. Treasury agreed to reduce the federal excise tax, an outdated fee originally assessed in 1898 to fund the Spanish-American war. The government is no longer be collecting the 3% fee on long-distance calls, and it is issuing refunds requested by consumers and businesses that paid the fee over the past three years.

The telephone tax refund is a one-time payment available on your 2006 federal income tax return, which will 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.

Here at Aeneas we're not in the tax advising business, but we do want to make it easier for you to get your refund so we've gathered some of the information put out by the IRS to help get you started. If you have questions you should see your accountant, or visit the IRS websites linked below.

Individuals
Individual taxpayers can take a standard amount from $30 to $60 based on the number of exemptions claimed on their tax return. For those claiming:

  • one exemption, the standard refund amount is $30
  • two exemptions, the standard refund amount is $40
  • three exemptions, the standard refund amount is $50
  • four exemptions or more, the standard refund amount is $60
The instructions to the 2006 1040 tax forms will provide more information on how to determine the correct number of exemptions. (Because the term “exemptions” does not appear on Form 1040EZ, people who fill out this form should follow the instructions carefully.)

The standard amount is based on actual telephone usage data, and the amount applicable to a family or other household reflects taxes paid on long-distance or bundled service by similarly sized families or households. Using this amount may be the easiest way for taxpayers to get their refund and avoid gathering 41 months of old phone records.

For many individual taxpayers who want to take the standard amount, there are no additional forms to file, and you only need to fill out one additional line on your regular income-tax return. Individuals choosing the standard amount can simply fill in the amount on Form 1040, 1040A, 1040NR or 1040EZ. People who don’t need to file a return can use a new, simple form (Form 1040EZ-T) to choose the standard amount.

Taking the standard amount is optional. It is also the easiest way to get a refund. Individuals who decide not to use the standard amount must figure their refund using the actual amount of tax they paid. To choose this option, taxpayers can fill out Form 8913 and attach it to their regular income-tax returns.

Visit the IRS's Telephone Tax Refund Q&A for more information.

Businesses
The standard amount is not available to businesses and nonprofits. Businesses and nonprofits must fill out Form 8913, Credit for Federal Telephone Excise Tax Paid, and base their refund requests on the actual amount of tax they paid. Businesses should attach this form to the income-tax returns they normally file.

Alternatively, businesses and tax-exempts can review their bills for April and September 2006 and use the formula descrived by the IRS to figure the refund.

Visit the IRS's Questions and Answers for Businesses and Tax-Exempt Organizations for more information.

Forms to Use to Request Your Refund

  • Extra line on your Form 1040 if you claim the standard refund amount
  • Form 8913 if you use actual totals
  • Form 1040-EX-T if you don't normally have to file a tax return

Viewing Old Telephone Bills
You can view or print past Aeneas bills for free online at MyBill. Or Aeneas will mail them to you for a small charge.