Average Taxpayers and Small Businesses Could Potentially Lose Out on Billions of Dollars
FOR IMMEDIATE RELEASE
Contact: Ralph Nader,
Washington, DC. — April 5 — The average American family may miss out on getting a minimum of $30 to $60 and perhaps much more back on their federal income tax, said consumer advocate Ralph Nader.
“People need to hurry so that they don’t miss out on billions of dollars that could go unclaimed from the biggest refund in U.S. history,” warned Nader. “All that’s required for a standard refund is filling in a line on the 1040 income tax form and submitting it before the April 17 deadline, unless you file for an extension of time.”
Last year, along with dropping an antiquated 3-percent excise tax on long-distance phone service, the federal government announced the $20-billion refund of all excise taxes paid on long-distance calls over the last three years, between February 28, 2003, and August 1, 2006. The Treasury Department estimates that $10 billion would go to businesses and nonprofits while the other $10 billion would go to individuals.
The refund applies to taxes paid on any long-distance telephone service, including landline, cell phone or Voice over Internet Protocol (VoIP) services. More than 159 million businesses and individuals are eligible for the refund.
No paperwork is necessary for an individual to claim a standard refund up to $60 based on the number of exemptions claimed: $30 for one, $40 for two, $50 for three and $60 for four or more. Claims can be made by filling in Line 7 of Form 1040, Line 42 on the 1040A, Line 9 on the 1040-EZ, Line 69 on the 1040NR, or Line 21 on the 1040NR-EZ.
There is no standard refund option available for businesses and tax-exempt organizations, although the IRS has come up with an “estimated method” of calculating refunds that requires less paperwork and fewer calculations.
For those with their telephone bills available, exact amounts due can be claimed by attaching Form 8913 to a return. There is no limit on amounts that can be claimed if you have documentation.
Low-income taxpayers who do not earn enough to have to file a federal income tax return can still claim their refund by filing a special 1040 EZ-T form. For them, the deadline is April 17, 2007. The nonpartisan Center on Budget and Policy Priorities estimates that there are 15 million households with telephones who do not file federal income tax returns.
Although the IRS created a media and public relations campaign to get the word out about the refund program, their tallies so far indicate that their efforts fell short.
Out of the federal tax returns filed through Feb. 16, more than 10 million taxpayers did not request the telephone tax refund, or about 30 percent of all taxpayers. The Maryland IRS office reported on March 27 that only one in three of Maryland tax returns claimed a refund.
Nader called on the IRS to put on a publicity blitz to advertise the refund during the last two weeks of the individual tax filing period. Special efforts should be made to reach low-income, minority populations most likely to be left out of the program.
Congress’s Easter recess is also an opportunity for lawmakers to raise awareness of the refund—and to tell people how to claim it—when they talk to constituents, community groups and local media back in their districts, said Nader. The offices of Congressmen John Conyers, Jr. (D-MI) and John Lewis (D-GA), among others, have expressed their intent to raise awareness of the refund.
Questions about the refund can be answered at “walk-in” IRS offices, by many community groups and tax professionals, or through government sponsored programs such as Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE). Taxpayers can also call the IRS toll-free at 1-800-829-1040.
The principal source is the IRS website (www.irs.gov).
There are some private websites such as www.RefundsforGood.org, a site started in March that helps visitors make a claim while encouraging them to donate to one of three sponsored nonprofits.