Phone tax refund is tempting
WASHINGTON (AP) -- The Internal Revenue Service warned Thursday that it will take prompt action against taxpayers and tax preparers who claim improperly large refunds from a discontinued telephone tax.
The IRS said early filings indicated that some taxpayers were requesting "large and apparently improper amounts" for the one-time refund from the long-distance excise tax that the government stopped collecting last August.
The agency said some taxpayers appeared to be asking for refunds of their entire phone bills rather than for the 3 percent tax on long-distance and bundled service they are entitled to. Others were making requests for thousands of dollars, indicating they had phone bills of more than 100,000.
The government has authorized a refund of tax collected on service billed during the period from March 2003 to July 2006. The IRS has urged taxpayers to request a standard refund amount ranging from 30 to 60, based on the number of exemptions they claim. It said no documentation is needed for the standard amount, which approximates the eligible amount for most taxpayers.
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