Qwest urges patience on excise-tax refund

Qwest Communications International Inc. is urging customers to stay on hold while the federal government figures out how much they will get when a federal tax dating back to the Spanish-American War ends and a portion is refunded.

The U.S. Treasury Department last week said it would end a legal battle with several companies over the federal excise tax on long-distance telephone service and that the IRS would stop collecting the tax. The IRS also will issue refunds, including interest, for the past three years — the time allowed based on the statute of limitations. Taxpayers will apply for the refunds on their 2006 tax forms.

Jerry Fenn, Qwest president for Utah, said Thursday that Qwest will stop assessing the tax on customers' bills by Aug. 1 and is awaiting word from the IRS on how the agency will handle the refunds.

"Customers need to be patient," Fenn said. "We've been working very hard, lobbying hard to get this tax removed. We think this is a great benefit for customers."

Qwest says it will work with customers to let them know what information will be needed to apply for a refund.

"That hasn't been determined yet, is the bottom line," Fenn said. "It's still kind of wait-and-see in how the government proposes to resolve this. Without that information, I think it's premature for us to decide how we're going to handle it."

The 3 percent tax has been applied to the amount of long-distance calling by individual customers, and "there are is no general rule as to that amount," Fenn said. "It's all over the place."

The tax is broken out on customer bills under "federal excise tax."

The Treasury has said taxpayers need to take no immediate action and that the IRS is working on a "simplified method" for people to claim the refunds on their 2006 tax returns for the federal tax paid from Feb. 28, 2003, through Aug. 1 of this year.

"So taxpayers won't have to spend time digging through old telephone bills, we're designing a straightforward process that taxpayers may use when they file their tax returns next year," IRS Commissioner Mark W. Everson said in a prepared statement last week. "Claiming a refund will be simple and fair."

Qwest, likewise, is saying customers need not call the company to request back bills.