2006 FET Refund Method Will Leave Taxpayer Money on the Table

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Tax recovery expert Byron Horner says IRS method will only return a fraction of the amount owed

Byron Horner, president of Utility Audit Company, Inc. (UAC), stated today that the estimation method approved by the IRS for businesses to use in figuring their 2006 Federal Excise Tax (FET) refund will not return all of the money they're entitled to. "There are significant problems with this highly-restrictive method," Horner comments.

Although the IRS is allowing businesses to estimate the amount of FET paid based on a comparison between their April and September 2006 phone bills, "capturing a truly representative usage sample from just two months isn't very likely," Horner notes. "If your long-distance usage was higher than local usage in the past but was not in April or September 2006 (the sample months), it is doubtful that this method will return the full amount of FET you're owed."

"The IRS admits that businesses have more varied phone usage patterns than individuals," Horner relates, "yet their estimation method only offers 2 set months as a basis for calculating your entire 41-month refund--one immediately before the tax ended and one month immediately afterward. Any large shifts in usage between those two months will tilt the differential equation, which can lower your refund for the entire period."

Another problem with the method, Horner says, is the cap on the total phone expenses businesses can claim; 1-2%, depending on the number of employees. "If your differential equation comes out to be more than 2%, the excess percentage will represent lost refund dollars," Horner explains. "Larger businesses capped at 1% have little choice but to invest the time and resources to calculate the exact figures and claim the amount of FET they actually paid."

In order to do so, businesses must be able to back up their claim with accurate records and phone bills for the past 41 months. "For businesses with multiple phone lines and cellular accounts, this process will be extremely tedious and time-consuming," Horner notes. Businesses may not think it's worth the time, and opt for estimation method. However, if they do, they may very well be leaving money on the table."

"The 2006 tax season is upon us," Horner adds. "Every business in the country is entitled to an FET refund. Yet, if they use the IRS' method, they'll leave billions of dollars on the table." "Businesses need to know that there are tax experts who will review and calculate their refunds in a fraction of the time, making sure they get all the money they're owed."

Utility Audit Company (UAC) specializes in helping businesses and tax-exempt organizations recover taxes. With 14 years' experience in utility and phone tax auditing, UAC has worked with small, medium, and large organizations in preparing FET refund claims. For more information or questions about the FET refund process, visit UAC's website at http://utilityauditco.com or blog the company at http://utilityauditco.wordpress.com. Byron Horner can be reached at 866-457-4262.

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