Billions in Telephone Excise Tax Refunds Go Unclaimed

A recent audit by the Treasury Inspector General for Tax Administration (TIGTA) indicates that only approximately 721,410 (5.6 percent) of the 12.8 million business taxpayers who had filed their returns had made telephone excise tax refund claims. The refunds associated with these claims totaled only $876.6 million, or 17.5 percent of the $5 billion collected.

The audit report was unable to pinpoint the reason that so many failed to claim the refunds. The report did, however, outline several conditions that may have contributed to businesses not making claims – the belief that the work involved and the associated fees outweighed the amount of the credit businesses would receive; the concern that the businesses would not have the required records to support the amount of their claims; and businesses remained unaware of the credit.

To request the Telephone Excise Tax Refund, businesses were required to complete the Credit for Federal Telephone Excise Tax Paid (Form 8913) and file it with their 2006 tax return. The form was completed by using the actual amount of refundable long-distance telephone excise taxes that were paid between March 2003 and July 2006 (41 months), or the business had an option to use an estimation method developed by the IRS.

If your business failed to claim this credit, it is not too late. You can still file an amended 2006 return with the Form 8913 to claim the credit. If we can be of assistance, please give us a call.

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