The IRS sent out a press release due to many people making mistakes on getting the free money they are entitled to through the one time Telephone Excise Tax Refund for 2006 taxes. One of the points highlighted by the IRS is that more than a third of the people who appear to be eligible for this tax refund failed to even apply for it.
It also seems that there are many people attempting to abuse this refund by claiming far more than they really should get. The IRS says it will investigate all large claims for this refund, and “take prompt action against taxpayers who request improper refund amounts and the return preparers who help them.”
Here are the five points highlighted in the press release as being mistakes the IRS is finding in tax returns that have been filed early:
- Filling out the Form 1040EZ-T incorrectly by failing to show a refund amount on Line 1a. Designed exclusively for requesting the telephone-tax refund, this simple form is for people who don’t need to file a regular income-tax return. Filing an incomplete form typically delays a refund and often leads to follow-up correspondence with the IRS. More than 10 million low-income people, many of them senior citizens, are expected to file this form.
- Failing to request the telephone tax refund on a regular federal income-tax return in situations where the taxpayer appears to qualify. More than one-third of early filers did not request the telephone tax refund. This includes filers on Forms 1040, 1040A, 1040EZ, 1040NR and 1040NR-EZ. About 136 million individuals and couples are expected to file one of these forms, and most will, likely, qualify for the telephone-tax refund. Anyone who files one of these forms cannot file Form 1040EZ-T.
- Filing duplicate requests. Usually, this involves filing both Form 1040EZ-T and a regular income-tax return. Anyone who files a regular return cannot file Form 1040EZ-T. Doing so will delay any refund for months and result in a phone call or letter from the IRS.
- Requesting a refund that appears to be based on the entire amount of the taxpayer’s phone bills, rather than just the three-percent tax on long-distance and bundled service.
- Requesting a refund in the thousands of dollars, suggesting that the taxpayer paid more for telephone service than they received in income.
Since this is a one time refund offer, make sure to fill in the paperwork correctly so that you receive the refund that you are owed.
For more information, you can see the IRS Tax Press Release