Advancing The Cause of Competition in the Telecommunications Industry
$6 BILLION IN TAX REFUNDS IS AT STAKE FOR TAXPAYERS OF ALL SIZES
If your company has been paying or collecting from its customers and paying over to the IRS the 3% Federal Excise Tax on toll telecommunications services, it is likely it or its customers are entitled to a refund of those payments going back three years, plus interest.
U.S. taxpayers pay almost $2 billion in federal excise tax ("FET") on interstate long distance telephone calls. In many cases, this tax isn't owed!
The Internal Revenue Code imposes a 3% tax on amounts paid for toll telephone service. "Toll telephone service" consists of services for which the charges vary in amount with the distance and elapsed transmission time of each call. Despite a strong defense by the IRS, in a series of pivotal cases the courts have ruled that charges for toll service that is not based on distance are not subject to the excise tax. In face of these consistent losses in the courts, the IRS appears ready to accept the defeat of its position and begin processing applications for refunds.
For taxpayers that believe they are entitled to a refund, the time to act is NOW! The rights to refund are subject to a statute of limitations, the longest period allowed being three previous years. Certain conditions must be met to qualify and there are other limitations to be dealt with, but any taxpayer with significant FET payments owes it to itself to investigate its rights to apply for a refund. THLG experts have guided others in this process and can guide you or your company through the refund process.
In addition, these developments also mean that if you qualify, you need to cease collecting, reporting and paying the excise taxes on your toll services (the excise tax may still apply to other communications service, essentially your local telephone service charges).
If you contact us and decide to retain us, you will gain from our expertise on these issues:* Why the tax code sections covering toll services doesn't cover today's long distance plans. * Which services fall outside the tax code. * Whether or not you qualify for a refund. * What you need to document your case. * How and where to file for a refund. * How to size your claim. * How to complete the refund claim forms. * Statutory time and dollar limits.
If your company is interested in learning more, or if you believe your customers would be interested in pursuing FET refunds, please contact us and ask for Charles H. Helein.
The Helein Law Group8180 Greensboro Drive, Suite 700 McLean, Virginia 22102 Tel: 703-714-1300 Fax: 703-714-1330 E-mail: email@example.com
The Front Lines is a free publication of The Helein Law Group, providing clients and interested parties with valuable information, news, and updates regarding regulatory and legal developments primarily impacting companies engaged in the competitive telecommunications industry.
The Front Lines does not purport to offer legal advice nor does it establish a lawyer-client relationship with the reader. If you have questions about a particular article, general concerns, or wish to seek legal counsel regarding a specific regulatory or legal matter affecting your company, please contact our firm.
Pursuant to Treasury Regulations, any U.S. federal tax advice contained in this communication, unless otherwise stated, is not intended and cannot be used for the purpose of avoiding tax-related penalties.