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Internal Revenue Service

A class action lawsuit has been filed challenging the Internal Revenue Service's (IRS) plan to reimburse taxpayers for the past three years worth of long distance phone taxes. The lawsuit claims small businesses and low income taxpayers will be shortchanged, or completely excluded, from the tax refunds. People were charged a 3% federal excise that should not have been applied to long distance service. The government officially ended the tax on July 31, 2006 and announced taxpayers would be eligible for refunds, plus interest, paid on long distance service bills from February 28, 2003 to July 31, 2006. A study by the nonprofit Center on Budget and Policy Priorities claims more than 10 million households could be left out of the rebate program.

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Last updated on Aug-14-06