The IRS is finding that there are already problems with returns involving the telephone excise tax refund.
The most common mistakes seem to involve the form 1040EZ-T. Mistakes include not filling out the form completely or filing the form and your regular 1040 or 1040EZ (it’s one or the other, folks).
It may also be that the word about the refund isn’t getting out. Early filed returns indicate that more than one-third of taxpayers have not requested the refund. Not asking for your money? C’mon, it’s a line item! Ask the IRS to show you the money.
And then there are just the stupid mistakes, like asking for a refund based on your entire long distance bill rather than the tax only (the refund is for telephone tax actually paid for long-distance service or a fixed amount determined by the number of exemptions that you claim, not a refund of your bill).
My favorite stupid mistake, however, involves taxpayers who file for thousands of dollars in telephone excise tax refunds (the amount that the IRS has estimated for one exemption is $30). Keeping in mind that the tax is 3% of your long-distance service, that implies that your total long-distance bill was more than $30,000 for the year. In some cases, the IRS has found that the amount claimed in long-distance bills was higher than the taxpayer’s income. Hmm.
This is a refund of tax paid, people, not a windfall. Use some common sense. The IRS allows $60 for two exemptions (or more for tax actually paid). If your refund claim is significantly more than that, be prepared to back it up. Otherwise, instead of your refund, you might receive a nice letter from your Uncle Sam…
