TETR

Yes, it's true. The TETR has to do with the communications tax (also known as the telephone excise tax), an emergency excise tax on long distance and bundled telephone charges, established back in 1898, apparently to fund the Spanish-American War. Due to litigation, the IRS no longer imposes the tax (as of July, 2006).

The IRS is issuing a one-time refund on 2006 income tax returns - but only for the excise tax billed after February 28, 2003 and before August 1, 2006 (the statue of limitations allows only 3 years).

History of the tax:

1898 imposed

1902 repealed

1914 reauthorized

1916 expired

1917 reauthorized

1924 repealed

1932 revived

2006 ceased

Individuals, businesses and tax-exempt organizations are eligible to request a refund of previously collected long distance telephone taxes (landline, wireless, bundled services).

INDIVIDUALS -

Not to worry if you don't have copies of these bills for documentation - the IRS is allowing individual taxpayers a standard refund amount between $30.00 and $60.00, based on the exemptions on your 2006 return. If you want to claim the actual amount, please locate your old bills for the above time period and either calculate the excise tax or send the copies to me to be calculated. If you take the standard refund amount, it applies as follows:

Number of exemptions on 2006 return ---------------- Refund amount

1 -----------------------------------------------------> $30

2 -----------------------------------------------------> $40

3 -----------------------------------------------------> $50

4 + ---------------------------------------------------> $60

INDIVIDUALS THAT FILE SCHEDULE C, E or F -

Filers of Schedule C, E or F may be eligible if gross receipts are more than $25,000.

BUSINESSES AND TAX-EXEMPT ORGANIZATIONS -

Businesses and tax-exempt organizations can base their refund on the actual excise tax billed after February 28, 2003 and before August 1, 2006 from their telephone bills. Or they can review their bills for 2 months and use a special formula to figure the refund.

Note: This information is not all-inclusive and may change at any time. Contact me for additional information.