Talk:Federal telephone excise tax

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Contents 1 Technical details 2 Ambiguous sentences 3 The word "and" 4 41 months

[edit] Technical details

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)

Ah, yes. Looks much better. I was trying to make a framework there that could be expanded upon later with more facts, details and figures. You did just that, thanks. Shortfuse 02:18, 14 September 2006 (UTC)

[edit] Ambiguous sentences

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?:

What number does "as many districts" refer to? Does this mean the number of cases the IRS lost in U.S. District Courts was equal to the number of cases it lost in Courts of Appeal?

What does "such cases" refer to? If it refers to the appeals and district court cases mentioned in the preceding sentence, it makes no sense—the sentence says all those cases were lost, not just "several" of them. The next part of the sentence says the IRS "[won] none" of its cases: How can the IRS have won none but only lost several? — Mateo SA (talk | contribs) 19:04, 27 November 2006 (UTC)

[edit] The word "and"

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:

there is a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication [ . . . . ]

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)

[edit] 41 months

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)

I have restored the language. I kinda agree with Taxman; I'm unclear as to why the language should be removed. Please enlighten. Yours, Famspear 02:21, 3 February 2007 (UTC)

PS: I should point out that this is exactly what I am having to explain to clients. It's useful for them to know why, in many cases, just taking the credit amount from the table (instead of searching for and interpreting oodles of phone bills) may be worth more than the few dollars you might save by taking the "actual" amount. Famspear 02:24, 3 February 2007 (UTC)

The point is that there is no interpretation. You look for the line that says "federal excise tax". I just examined all 41 months of telephone bills, which in this case were cell phone bills I had punched in a three ring binder before hand for record keeping purposes, and gathered the appropriate figures, which were on the same page of each bill. It did not take that long. I can go with "locating" but "examining" is duplicative and implies there is more than locating the line that says "federal excise tax", usually locating in a summary section of the bill, and copying that amount to Form 8913. Calwatch 02:41, 3 February 2007 (UTC)

You're overlaying your single experience and extrapolating it too much. I can assure you the lion's share of people do not have all their phone bills in a three ring binder. Further some bills are much more difficult to read. I can also assure you many businesses don't keep all the bills even if they should. I've even heard people say that some phone companies have received so many calls to get old bills that they have instituted a specific charge for it. - Taxman ^Talk 04:09, 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)

Which would be nice, except there is a column specifically for bundled service on the appropriate federal form. Calwatch 08:40, 9 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)