Federal Excise Tax Refund    The federal telecom excise tax was first initiated in 1898 to fund the Spanish-American war. By taxing the wealthy, the Federal Government was targeting the majority of people who had telephones at that time. The government has continued to use this tax for general fund purposes. Several large corporations challenged the tax in court and ultimately won, setting a precedent for others to win. On May 25, 2006 the IRS formally announced they will stop collecting the federal excise tax on certain telecom services; specifically long distance charges which no longer use a distance sensitive rate plan. As such, long distance, cellular telephones and certain bundled services including VoIP services will no longer be subject to the tax as of August 1, 2006. Additionally, individuals and businesses qualify for a refund spanning 41 months - a statute of limitations. The refund covers the period from February 28, 2003 to August 1, 2006. Business refunds are to be incorporated into the 2006 tax return. Individuals can use a standard deduction of $30 to $60 based upon exceptions claimed. Most businesses with a significant amount of long distance and cellular telephone usage should base their refund on the actual amount spent, and keep copies of invoices paid for evidence in the event of an audit. Appropriate interest shall also be applied. On November 16, 2006, the IRS released an estimate refund option for businesses to use as an alternative to assimilating forty-one months of actual federal excise tax expense. The formula involves the total federal excise tax difference of applicable April 2006 invoices against the same September 2006 invoices where the tax was eliminated. The resulting federal excise tax difference to be claimed cannot be over 2% for businesses under 250 employees and not over 1% for businesses over 250 employees. This percentage can then be multiplied times the total applicable telecom expense for the forty-one month period. While this option has merit for businesses under 250 employees, its resulting factor for most businesses over 250 employees will be considerably less than the actual tax paid. Therefore, for larger businesses, Tellennium recommends using the actual amounts. For Tellennium clients utilizing our Integrated Management Solution, the invoice records are available and Tellennium will provide the refund amount and assist in the filing process as part of our audit services. For other clients subscribing to our audit and optimization service, we will work with the individual carriers and businesses to obtain the necessary information and also assist in the filing process. Without Tellennium's Integrated Management Solution, this is a daunting task to acquire 41 months of invoices and research only the specific items on each invoice which qualify for the refund. Tellennium is highly experienced and here to help. We welcome the opportunity to work with those businesses wanting this refund. The estimated amount of refunds for individuals and businesses are expected to surpass $10 billion.   Contact Us  | © Tellennium Inc. 2008