It’s tax cut-apalooza on Capitol Hill. No wonder. It’s an election year and a majority of Americans are not happy with the current state of affairs, including the economy. What’s a lawmaker to do? Cut taxes.
So, tax packages are rolling in, purporting to offer "relief" to taxpayers. Most are, in my opinion, targeted at a specific "base" (high-income taxpayers) and offer no real relief to most taxpayers. Many are flat out favors to special interest groups (i.e. certain corporations like oil companies, who are experiencing record profits). And some are, well, just plain silly. They are band-aids on a gushing wound. And the best example of the latter? This news, just in from IRS, that the will stop collecting the federal excise tax on long-distance – though not local – telephone service.
Now, a conspiracy theorist would wonder (and we are Erblaw profess not to be conspiracy theorists, despite having seen Mel Gibson’s Conspiracy Theory a number of times) about the timing of this cut, hot on the heels of the NSA snafu…
But we won’t dwell on such trivia. We’ll focus on the bigger picture: the administrative nightmare (and associated costs) with the retroactive nature of this plan. Yes, retroactive. Insane.
Of course, in fairness, the announcement follows decisions in five (yes, five) federal appeals courts holding
that the excise tax, from 1898, does not apply to long-distance service as it is billed
today. As a result, taxpayers may file for refunds (including refunds) of all excise tax
paid on long-distance service billed since February 28,
2003.
The refund can be claimed on a taxpayer’s 2006 tax return. The process for claiming the actual amount has not yet been revealed. I can’t wait to see what they come up with…
