Angel's tax tip...

I'm not an accountant. I do our taxes but only out of wanting to be self sufficient if need be. My SIL works for Sprint and sent this to us awhile back. I thought anyone who owns a cell phone might be interested....

Sprint Nextel customers came up winners last week, as the U.S. Department of Treasury said it would stop collecting the Federal Excise Tax (FET) on many telecommunication services. This means that our customers soon will no longer have to pay the 3 percent line item that appears every month on their wireless and long-distance invoices. It also means that customers are owed refunds for the taxes they have paid since March 2003.

As you may have read on i-Connect in January> <http://mypinpoint.corp.sprint.com/portal/dt?PinPointTabContainer.setSelected=Home&last=false&display=view&contentID=PortalContent/SprintNews/20060110_17025>,> the FET was first enacted in 1898 to fund the Spanish-American War. While that conflict ended after four months, the government continued to collect the FET more than 100 years later. In recent months, a growing number of federal appellate courts have ruled that the tax does not apply to many modern communications services. On May 25, the federal government conceded that it can no longer defend collecting this outdated tax for long-distance, VoIP, prepaid or wireless services. Local telephone service will continue to be subject to the tax for the time being, but the Treasury Department will press Congress to repeal this part of the tax, too.

FET refunds will come directly from the IRS. Companies like Sprint Nextel simply collect the tax and pass it directly to the federal government. The IRS has begun to develop the process for customers to apply for FET refunds next year on their 2006 income tax returns. Taxpayer instructions will be published by July 31 (2006). Customers inquiring about the> refund process should be directed to look for more information on the IRS Web site (http://www.irs.gov/ ) at that time.