More than 19,400 federal tax returns filed by North Dakotans during February failed to request the telephone tax refund, the Internal Revenue Service says.
This amounts to an estimated $583,000 or more that North Dakotans have not requested. With about 33 percent of the returns missing the refund, the state is slightly worse than the rest of the nation, the IRS announced this week.
Nationwide, more than 10 million early filers - about 30 percent - did not request the refund, according to an IRS news release.
Nearly half of those returns - more than 4.8 million - were completed by a tax preparer, says the IRS, which expressed surprised by the finding.
"If a taxpayer is entitled to receive the telephone excise tax refund and did not request it on the filed 2006 tax return, he should submit an amended return, Form 1040X, and complete line 15," said Carrie Resch, an IRS spokesperson, in a statement.
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The government stopped collecting the long-distance excise tax last August after several federal court decisions held that the tax does not apply to long-distance service as it is billed today.
Federal officials also authorized a one-time refund of the federal excise tax collected on service billed during the previous 41 months, stretching from the beginning of March 2003 to the end of July 2006. The tax continues to apply to local-only phone service.
To make the refund easier to figure, the government established a standard refund amount, based on personal exemptions, ranging from $30 to $60.
Taxpayers who have phone bills and other records can request the actual amount of excise tax paid. To do this, they must fill out Form 8913, Credit for Federal Telephone Excise Tax Paid. Individuals and businesses should attach it to their regular 2006 income-tax returns. Tax-exempt organizations should attach it to Form 990-T.
If you paid more than the standard amount, you may figure your refund using the actual amount of tax shown on your phone bills and other records.
Base your refund request on the three-percent federal tax paid, not the total phone bill, the IRS says. Do not count tax paid on local-only service. You must have the phone bills or other records adequate to support the amount you are requesting. These documents should not be sent along with the refund request, but should be retained in case the IRS questions the amount requested. Figure the actual refund amount on Form 8913, Credit for Federal Telephone Excise Tax Paid, and attach this form to the 2006 income tax return.
Though using the standard amount is optional, it is easy to figure and approximates the eligible amount for most individual taxpayers, the IRS says. Taxpayers only have to fill out one line on their return, and they don't need to present proof to the IRS.
The refund is requested using a special line on Forms 1040, 1040A or 1040EZ. Taxpayers who electronically file their tax return will notice it is included in the software. You can check out free e-file options at www.irs.gov .
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Individuals who don't have a regular income tax filing requirement can request the refund using the new Form 1040EZ-T, designed exclusively for those who do not have a regular tax filing requirement. Some software companies are providing electronic filing of this special form. For more information, go to www.irs.gov and click on Free File.
The IRS is encouraging taxpayers to e-file their tax returns in lieu of paper filing. Last year, 59 percent of North Dakotans e-filed their federal tax return.
For more information, go to the IRS Web site at IRS.gov and select the link for the Telephone Excise Tax Refund.
