You may qualify for a one time tax credit on your 2006 Federal Tax Return for Telephone Services. The Telephone tax refund is a one-time credit available on your 2006 federal income tax return, designed to correct previously collected federal excise taxes on long-distance or bundled services.
Several recent federal court decisions have held that the tax does not apply to long-distance service as it is billed today. The IRS is following these decisions and crediting the portion of the tax charged on long-distance calls. The IRS is also crediting taxes collected on telephone service under plans that do not differentiate between long distance and local calls including bundled service.
The IRS will credit to you the taxes on long-distance or bundled service billed to you for the period after Feb. 28, 2003 through Aug. 1, 2006. Taxpayers can request this credit when they file their 2006 tax returns.
For questions or more information, please visit http://www.irs.gov or contact a certified tax preparer.