$4.95 Software Helps Consumers Beat IRS On Phone Tax Refund

Share Article

The IRS is offering individual filers a "safe harbor" credit of only $30-$60. The actual refund should be about 1.4 - 1.5 times an average pre-tax bill for long distance and cellular service. A consumer that's on a $69.99 per month wireless plan is entitled to a credit of about $100. However, according to the government, it'll take as much as 13 hours and 37 minutes to compute the full amount with interest. Hardly worth the effort. Phone Tax Refund Calculator© is a spreadsheet template that enables consumers and businesses to compute their actual Federal Telephone Excise Tax Refund in minutes, instead of hours. The software retails at only $4.95 for the consumer version and $24.95 each for the corporate and non-corporate business versions.

Everyone's getting a $30-$60 credit on their 2006 tax return courtesy of the US government. That's because the Federal Telephone Excise Tax on long distance and cellular service no longer applies and the government's been ordered to refund taxpayers' money all the way back to March 2003. Taxpayers don't even have to provide copies of phone bills to qualify. If taxpayers claim 1 exemption (i.e. they're single), taxpayers get $30, 2 exemptions - $40, 3 exemptions - $50 and 4 or more exemptions - $60.

That's the good news.

The bad news, says one expert, is that the "safe harbor", or no-questions-asked, refund of $30-$60 is considerably less than what millions of consumers are actually entitled to. According to Yosef Rabinowitz, Managing Director of TBRC Cost Recovery, LLC, a New York-based consulting firm that reduces business' phone bills and recovers money for billing errors, the true refund, including interest, should be approximately 140% - 150% of a consumer's or business' average pre-tax long distance and cellular bill. For example, if a cellular customer is on a plan that costs $69.99 per month (and doesn't exceed his/her monthly allotment of minutes), the Federal Excise Tax refund could be as much as $105, and that's before including any long distance activity from land lines.

In order to get the higher refund, though, taxpayers must go through 41 months worth of bills, total up the Federal tax into 14 separate 3-month periods, fill out Form 8913 and calculate the interest on each 3-month period separately. According to the Paperwork Reduction Notice on Form 8913, the government estimates that it will take 13 hours and 37 minutes to compute the refund and interest, and another 13 minutes to fill out the form. "Hardly worth the effort for only an extra $40, $50 or even $150. Besides, who has that kind of time?" says Rabinowitz.

So Mr. Rabinowitz put on his amateur programmer's hat and created Phone Tax Refund Calculator©, which cuts the calculation time down to under 90 minutes in most cases, and for many individuals, as little as 15 minutes. The software, which is in the form of a Microsoft Excel spreadsheet template and sells for only $4.95 at http://www.PhoneTaxRefundCalculator.com, enables users to simply input the Federal tax amount from each phone bill directly into a data entry screen. The software then instantly calculates the refund and interest. It also generates a simulated Form 8913 from which users, or their accountant, can copy the numbers directly onto the actual form, box by box, in just a few minutes (the software also has a direct link to download the form and instructions from the IRS' website).

What if taxpayers don't have all of their long distance or cellular bills dating back to March 2003? Most carriers only keep 18 months of bills available on file. However, if they were on a fixed monthly plan, all is not lost, says Rabinowitz. "As long as you know what your base monthly fee was, take 3% of that amount and enter it into the software for any month that you don't have your bill. If you went over your minutes in that month, you'll be leaving some money on the table, but you'll still come out way ahead overall. If the IRS ever audits your 2006 tax return and questions your phone tax refund, call up your carrier. They may not have your old bills on file, but they do keep your account history and can verify what your base monthly fee was. I expect that the IRS will accept that as valid proof that you paid the tax."

Phone Tax Refund Calculator© is available in 3 modules: Individuals (not self-employed), Corporations/Non-profits, and Partnership/Trusts/Estates/Self-employed individuals. The business modules also compute the "Business Estimation" method and retail for $24.95 each for a single-user license.

Evaluation Copy of Software Available To Recognized Media Outlets Upon Request

Note to media: Please do not include telephone number in any articles. Refer only to the website.


Share article on social media or email:

View article via:

Pdf Print

Contact Author

Yosef Rabinowitz
Visit website