As previously announced, the IRS will be handing out refunds for those taxpayers who use long-distance service. The refund will be available on the 2006 federal income tax return for individuals and businesses.
Responding to concerns that the tax refund might require taxpayers to dig through old phone bills to claim the tax, the IRS has determined a “standard amount” of refund for each taxpayer based on the total number of exemptions claimed on the 2006 federal income tax return. The standard amounts are:
- $30 for one exemption
- $40 for two exemptions
- $50 for three exemptions
- $60 for four or more exemptions
If an individual taxpayer believes that his or her actual amount of tax paid between February 28, 2003 and August 1, 2006 exceeds the standard amounts, the refund can be calculated using that amount instead of the standard amount.
Businesses must claim the refund based on the actual amount. Worthless. Many businesses will ignore the refund. The size of the refund is likely not worth the effort for most businesses to comb through more than three years’ worth of phone records to tally the refund.
Though the IRS claims to understand the “concerns” of businesses, it will likely do little to assist those businesses. There is talk of developing an estimation method, but nothing has been presented to date.Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel.