|
Urgent News About FET Refunds
UAC Clarifies Refund Process
Changes in 2006 to the federal law pertaining to Federal Excise Tax on bundled, long distance and cellular phone service and the resulting refunds being offered by the IRS are causing a great deal of confusion.
UAC recently received new information from the IRS that affects how tax-exempt non profit organizations (hospitals, schools/colleges/universities, federal credit unions and governmental entities are to process their FET refunds. These organizations are totally exempt from the tax, including charges for local phone service (on which the tax still applies) . To have the full amount of tax paid refunded, these organizations must first file refund claims directly to the IRS for the total amount of tax paid during the past 3 years. Then they must calculate the amount of tax paid on only long distance and cellular service from the beginning of the 3 year refund period back to 3/1/03 and claim it on their 2006 Form 990-T (or applicable Federal Return). Simply claiming the refund on their federal return will not return the full refund they are owed. The IRS has failed to make this distinction clear to these tax-exempt organizations. In fact, since ending the tax on 5/25/06, the IRS has published nothing to accurately guide these organizations through the process.
To further complicate matters, the IRS is offering two choices for calculating the long distance refund on federal returns. Organizations can either estimate the tax using a formula offered by the IRS or calculate the actual amount of tax paid during the refund period. The estimation method uses only two months selected by the IRS to establish the refund percentage for the entire 41-month time frame. Organizations with more than 250 employees (which applies to a number of hospitals, colleges and governmental entities) will have their estimation percentage capped at 1%. (The actual percentage could be 2% or more.) Using the estimation method will, in the majority of cases, not return the full amount owed. Organizations with more than 250 employees will leave a large amount of their FET refund on the table.
UAC has successfully processed FET refunds for 14 years. In concert with the FET recovery process, UAC will also stop and recover other exemptible taxes on utility and phone bills. There is no up front fee. We are only paid for successfully recovering taxes.contact UAC today.
|
