Illegal tax paid, but no refund coming?

The government has decided to refund a tax which has been collected illegally on long distance telephone service. The 3% tax had been collected by phone service providers without Congressional authorization.

The government says taxpayers can get back the last three years of the excise tax payments by asking for the money on their 2006 tax returns.

Problem is, many senior citizens and other low-income folks don’t have to file tax returns.

A study by the nonprofit Center on Budget and Policy Priorities found more than 10 million households will be left out of the tax rebate program.

The IRS says they will develop a simple form for people to use. Yeah, right. IRS and simple? Nearly impossible. So how many of these people will actually file for the refunds?

Plus, why only refund for the last three years?

The tax has been levied for decades, dating back to when long-distance phone charges were based on time and distances of the calls. Many companies long ago dropped the distance factor and began charging a flat per-minute rate. The government continued to collect the tax, even though Congress had not amended the tax law to reflect the change in long-distance charges.

Can you say lawsuit?

Attorneys in the class-action suit filed in U.S. District Court in Washington say consumers ought to be entitled to refunds covering most of the past decade, not just the past three years. A study by Congressional Research Service estimated that $6 billion a year had been collected from the long-distance phone customers.

That’s a nice chunk of change. Since it has gone on so long, I question the three-year rule as well. The government should have stopped this long ago; instead, they kept fighting – and losing – lawsuits filed by large corporations right up thru this past May.

I’m no fan of class-action suits; seems like the only people who really get paid are the attorneys. Maybe we can do something ourselves. Contact your representatives and let them know that we should get more than three years’ tax refunds. And also let them know they need to tell the public that the refunds are available. Everyone should get back the money they have paid.