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Dear fellow editors: I have added some details to this article with citations to the statutes and IRS notice on the year 2006 change. I also changed the reference to the action from "repeal" to "effective partial repeal." Actually, even "effective partial repeal" may not be strictly technically correct -- in effect, the tax as applied to the services deemed to be non-taxable was simply an improperly collected amount, apparently -- so there was really no statute to "repeal" on that count (and the IRS cannot repeal statutes anyway) -- just refund the money and stop collecting on the services that are not taxable. But the average person can perhaps understand this better by thinking of it as an "effective partial repeal." Yours, Famspear 20:09, 13 September 2006 (UTC)
The section Controversy currently reads as follows:
On May 10, 2005 The American Bankers Insurance Group won an important in the fight against the telephone excise tax, when the United States Court of Appeals for the 11th Circuit reversed the decision of the United States District Court for the Southern District of Florida, which erroneously held that the services that ABIG purchased from AT&T were taxable. [1]
This was one of several U.S. Court of Appeals cases that the Internal Revenue Service lost in as many districts on the same issue. The IRS withdrew only after losing several of such cases, and winning none (at the Appeals level or higher).
What do those last 2 sentences mean?:
Dear fellow editors: I have not had a chance to study the cited cases that led to the decision by the IRS, but it appears from the news releases quoted in the article that the problem was the following language from the statute:
The key word here is "and." For non-lawyers, what this basically means is that the word "and" in a statute used this way would mean that the service would have to fulfill BOTH requirements to be taxable: the charge would have to vary by both time AND distance, to qualify as taxable. I suspect few if any toll telephone call charge amounts are really computed on the basis of the actual physical mileage (distance) between caller and "callee." I guess they're just computed on the basis of time (so much per minute, etc.).
Had the Congress used the word "or" instead of "and," the outcome would be quite different. Anyway, hopefully the article is making it clear as to why the toll service in question is not taxable. If not, maybe I can get back to this later and add more clarification (I'd have to look at the texts of the court decisions). Yours, Famspear 17:28, 30 November 2006 (UTC)
Consumers and other entities may instead elect to itemize the deduction based on the actual amount of tax paid during the lookback period. This would require locating and examining forty-one months of telephone bills to determine the proper credit amount to seek.
Calwatch, you've removed the latter sentence again, but failed to explain why. It's useful detail, and I don't see how you'd justify it as POV. Please discuss before removing something twice. - Taxman Talk 01:24, 3 February 2007 (UTC)
Dear fellow editors: Here's another possible complication. I don't know if this would ever come up, but you could also have an interpretation and analysis problem if your phone company provides you with both long distance service and local-only service, but the monthly bill itself does not separately state the telephone excise tax for each service on the bill. In such a case, you would have to make some sort of rational and systematic pro-rata allocation of the total excise tax on each bill to the long distance and local components, based (presumably) on the ratio of the long distance charges to the total charges and the ratio of the local charges to the total charges. I get both local and long distance service from my land line provider, but I haven't bothered to actually look at the bills close enough to see if this would be something I would need to do or not. Yours, Famspear 21:10, 7 February 2007 (UTC)
Yes, and as I said the analysis and allocation would be required if your bill separately states the long distance and local components of the charges -- but does not separately state the related excise tax for each of those two sets of charges (i.e., just one amount on the bill for the excise tax). Because the phone charges themselves would be separately stated, this kind of phone service would not qualify as "bundled service." Therefore, the rule that "bundled services are non-taxable" would not apply here. In this case, to claim the credit or refund, you would need to compute a pro-rata allocation of the tax. The pro-rata portion of the tax allocable to the taxable service would be non-refundable (non-creditable), while the pro-rata portion of the tax allocable to the non-taxable service would be refundable (or creditable). Again, I don't know whether this is really a problem or not, as I haven't looked at the phone bills yet to see if the bills show the local and long distance charges separately, while showing the excise tax as only one figure. Yours, Famspear 15:23, 9 February 2007 (UTC)
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The comment(s) below were originally left at Talk:Federal telephone excise tax/Comments, and are posted here for posterity. Following several discussions in past years, these subpages are now deprecated. The comments may be irrelevant or outdated; if so, please feel free to remove this section.
==WP Tax Class==
Although I'm supposed to limit it to a start class until someone else agrees to raise it above that, I decided to place it on a B class level and if other's agree I certainly wouldn't oppose it going higher. EECavazos 04:23, 11 November 2007 (UTC) ==WP Tax Priority== I put it on a mid priority because it's a nationwide excise tax, but it probably should be place in a low priority because it was a specific tax within the family of excise taxes and is not one that is applied worldwide because the article limits it to the USA. EECavazos 04:25, 11 November 2007 (UTC) |
Last edited at 04:25, 11 November 2007 (UTC). Substituted at 15:01, 29 April 2016 (UTC)