| Businesses have a one-time opportunity to file for refunds of federal excise taxes (FET) paid on long distance and bundled telephone services from March 1, 2003, through July 2006. Many businesses may be unaware of this refund opportunity and could miss out if they do not take action.
“Several recent federal court decisions have held that the tax doesn’t apply to long distance service as it is billed today,” said Don Corbett, tax partner at Grant Thornton’s Seattle office. “Businesses of all sizes are eligible for the refund.”
The one-time only refund must be claimed on taxpayers’ 2006 income tax returns. The original due date for calendar 2006 returns filed by corporations is March 15, and for individuals and other entities is April 15. Corporations, S corporations, partnerships, trusts, estates and nonprofit tax-exempt organizations are entitled to request the telephone tax refund. Refunds apply to FET paid for landline, wireless or Voice over Internet Protocol (VoIP) long distance service.
The refunds also apply to bundled telephone services — the provision of local and long distance service under a single plan that does not break out charges for local telephone services from other services. All refunds will include interest.
Businesses that have access to paid invoices during the period can file a refund claim based on actual FET paid. If actual records are unavailable, or if assembling those records would be overly burdensome, the IRS has developed a formula that can be used to estimate refunds due.
Individual taxpayers are also eligible for the refund. | 
