TELECOM Digest OnLine - Sorted: The Front Lines - FET Refund Opportunity

The Front Lines - FET Refund Opportunity

Jonathan Marashlian (
Thu, 28 Jul 2005 13:30:37 -0400

Advancing The Cause of Competition in the Telecommunications Industry



If your company has been paying or collecting from its customers and
paying over to the IRS the 3% Federal Excise Tax on toll
telecommunications services, it is likely it or its customers are
entitled to a refund of those payments going back three years, plus

U.S. taxpayers pay almost $2 billion in federal excise tax ("FET") on
interstate long distance telephone calls. In many cases, this tax
isn't owed!

The Internal Revenue Code imposes a 3% tax on amounts paid for toll
telephone service. "Toll telephone service" consists of services for
which the charges vary in amount with the distance and elapsed
transmission time of each call. Despite a strong defense by the IRS,
in a series of pivotal cases the courts have ruled that charges for
toll service that is not based on distance are not subject to the
excise tax. In face of these consistent losses in the courts, the IRS
appears ready to accept the defeat of its position and begin
processing applications for refunds.

For taxpayers that believe they are entitled to a refund, the time to
act is NOW! The rights to refund are subject to a statute of
limitations, the longest period allowed being three previous years.
Certain conditions must be met to qualify and there are other
limitations to be dealt with, but any taxpayer with significant FET
payments owes it to itself to investigate its rights to apply for a
refund. THLG experts have guided others in this process and can guide
you or your company through the refund process.

In addition, these developments also mean that if you qualify, you
need to cease collecting, reporting and paying the excise taxes on
your toll services (the excise tax may still apply to other
communications service, essentially your local telephone service

If you contact us and decide to retain us, you will gain from our expertise
on these issues:

* Why the tax code sections covering toll services doesn't cover
today's long distance plans.
* Which services fall outside the tax code.
* Whether or not you qualify for a refund.
* What you need to document your case.
* How and where to file for a refund.
* How to size your claim.
* How to complete the refund claim forms.
* Statutory time and dollar limits.

If your company is interested in learning more, or if you believe your
customers would be interested in pursuing FET refunds, please contact us and
ask for Charles H. Helein.

The Helein Law Group

8180 Greensboro Drive, Suite 700
McLean, Virginia 22102
Tel: 703-714-1300
Fax: 703-714-1330

The Front Lines is a free publication of The Helein Law Group,
providing clients and interested parties with valuable information,
news, and updates regarding regulatory and legal developments
primarily impacting companies engaged in the competitive
telecommunications industry.

The Front Lines does not purport to offer legal advice nor does it
establish a lawyer-client relationship with the reader. If you have
questions about a particular article, general concerns, or wish to
seek legal counsel regarding a specific regulatory or legal matter
affecting your company, please contact our firm.

Pursuant to Treasury Regulations, any U.S. federal tax advice
contained in this communication, unless otherwise stated, is not
intended and cannot be used for the purpose of avoiding tax-related

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