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Telephone Tax Excise Refund: Did You Collect Your $30-$60?

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In 1898, the telephone excise tax was created to help fund the Spanish American War. The tax was collected long after the war ended and, after a successful constitutional challenge, the IRS agreed to refund the 3% tax for the period between March 2003 and July 2006. What does this mean for everyone? All you needed to do was check a box and the money was yours… except only 71% of tax filers actually claimed it. That means 29% of people walked by that thirty dollar bill and decided not to pick it up. Also, many tax payers who did claim it were actually eligible to claim more if they were willing to do a little paperwork (I can understand taking the easy money and not trying to dig up phone bills, which you probably don’t ever keep anyway).

Now, let’s say you’re one of the taxpayers who failed to claim the refund, how do you get it now and is it worth it? It’s easy, you need to file a 1040X, an amended 1040 return, and wait. I estimate that filling out the form and mailing it out probably will take you around 15 minutes, so $30-$60 for 15 minutes isn’t bad right?

{ 7 comments, please add your thoughts now! }

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7 Responses to “Telephone Tax Excise Refund: Did You Collect Your $30-$60?”

  1. Posco says:

    hmmm…. except that there is no such thing as a “thirty dollar bill” in U.S. currency ;)

  2. MoneyNing says:

    No because I took the standard deduction last year :)

    If you have online accounts, I believe the phone company websites will have all your online statements available (and hence all the bills and activities).

  3. jim says:

    You can claim it even with a standard deduction.

  4. Brandon says:

    Believe it or not, I had my first phone ever connected on August 1, 2006.

    I *almost* claimed it anyway figuring that no one would notice, but I was a little afraid of being audited.

  5. jim says:

    It’s a safe harbor amount, I was under the impression anyone could claim it and there’d be no questions asked.

  6. Tim says:

    jim, if you ever got audited and you did not have a qualifying phone service during the years covered under the excise refund, you would have to repay. chances are no one would notice. the only people getting noticed are people who are claiming exorbitant excise tax on their returns.

  7. jim says:

    Luckily I did have service and that’s why I never really dug into it deeper to see if someone without it could still claim it, good information to know though. Thanks Tim.


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