The Internal Revenue Service is allowing individuals to file for a refund on the Feral Excise Tax -a 3% federal tax on all telephone services.  The tax has been in effect since the 1800s and was used to fund the Spanish-American War. Several recent federal court decisions have held that the tax does not apply to long distance service as it is billed today. The excise tax continues to apply to local only service.

The refund on the Excise Tax is a one-time payment available on the 2006 federal income tax return. It is designed to refund previously collected long distance telephone taxes. Taxpayers will have a choice of refund - they can apply for:

• A standard refund in an amount between $30 and $60.  The refund amount is based on the total number of exemptions claimed on the customer's 2006 tax return.  Taxpayers who choose the standard amount will only need to fill out one line on their tax returns and will not need to locate old phone bills.
• A refund based on the actual amount of tax paid on long-distance service for the period after Feb. 28, 2003 and before Aug. 1, 2006.  Taxpayers who this option should review their phone bills since Feb. 28, 2003.

For more information about the refund and filing tips, visit the Telephone Tax Refund Questions and Answers page on the Internal Revenue Service's website.