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ETHEL, PLUG ME INTO THE IRS EXCHANGE. I WANT MY REFUND

May 26, 2006

The IRS has announced (Notice 2006-50) the procedure for obtaining refunds of the excise tax on long-distance phone services. The Treasury yesterday announced it was abandoning efforts to collect the tax, enacted to finance the Spanish-American War, following 12 straight court defeats.

Taxpayers, including 1040 filers, will be able to apply for a refund of the tax on their 2006 returns, which will have a new line for the refund. The IRS will only accept refund requests on regular 2006 income tax returns; they won't accept early refund claims made on the generic refund claim form, Form 843.

1040 filers will have a choice of collecting a "safe-harbor" amount yet to be determined or instead claiming a refund of their actual tax paid off of their phone bills from February 28, 2003 to August 1, 2006.

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