The Internal Revenue Service is giving money away -- and tax preparers are cringing in fear that clients might want to squeeze out every penny they've got coming.
February 4, 2007 (Press Release) --
The Internal Revenue Service is giving money away -- and tax preparers are cringing in fear that clients might want to squeeze out every penny they've got coming.
The cause of this role reversal is a one-time-only refund of an excise tax on long-distance telephone bills. The IRS long had argued that an excise tax dating to the Spanish-American War should apply to long-distance phone service. After losing round after round in the courts, the IRS finally stopped collecting the tax in 2006 and announced it will cut checks to millions of Americans who paid for long-distance -- making it one of the most far-reaching tax breaks this tax season.
It's such a boon that the experts are encouraging taxpayers who otherwise don't have to file a return -- such as low-income taxpayers or some senior citizens -- to file a special Form 1040EZ-T so they can claim a refund. The IRS estimates at least 10 million Americans -- and maybe far more -- will do just that.
Most individual taxpayers are likely to settle for a standard amount based on how many exemptions they claim on their tax return. For example, single taxpayers can pocket $30, while a family of four would get $60.
Taxpayers might get bigger refunds, however, by actually totaling up how much tax they paid during a 41-month period from March 2003 through July 2006. (Use Form 8913.)
There's also a short-cut for businesses. They essentially can compare phone bills from April and September 2006 to calculate what percentage of their phone bills for the 41-month period they deserve as a refund.
Tax pros don't relish the idea of sifting through mounds of tax bills to get down to the dollar for more exacting clients, however. Time is their most precious asset these next 2 1/2 months known as ``the Busy Season.'' If you want every dollar you're due, plan on doing the grunt work yourself -- or face a tax preparer's bill that could wipe out your savings.
``Is it worth potentially wasting hours of time for $30 on a tax return?'' Steve Yukelson, a certified public accountant in Westlake Village said, only half-joking.
Sharon Kreider, a Sunnyvale CPA, said she was relieved when the first client she met with this tax season said it wasn't worth the hassle to document an estimated $100 refund.
``The guy said, `I'm not bothering. It's not worth it,' '' Kreider said. ``Now watch, the next one will make me go back for $23.''
Author: Mark Schwanhausser
Source: http://www.mercurynews.com/
The cause of this role reversal is a one-time-only refund of an excise tax on long-distance telephone bills. The IRS long had argued that an excise tax dating to the Spanish-American War should apply to long-distance phone service. After losing round after round in the courts, the IRS finally stopped collecting the tax in 2006 and announced it will cut checks to millions of Americans who paid for long-distance -- making it one of the most far-reaching tax breaks this tax season.
It's such a boon that the experts are encouraging taxpayers who otherwise don't have to file a return -- such as low-income taxpayers or some senior citizens -- to file a special Form 1040EZ-T so they can claim a refund. The IRS estimates at least 10 million Americans -- and maybe far more -- will do just that.
Most individual taxpayers are likely to settle for a standard amount based on how many exemptions they claim on their tax return. For example, single taxpayers can pocket $30, while a family of four would get $60.
Taxpayers might get bigger refunds, however, by actually totaling up how much tax they paid during a 41-month period from March 2003 through July 2006. (Use Form 8913.)
There's also a short-cut for businesses. They essentially can compare phone bills from April and September 2006 to calculate what percentage of their phone bills for the 41-month period they deserve as a refund.
Tax pros don't relish the idea of sifting through mounds of tax bills to get down to the dollar for more exacting clients, however. Time is their most precious asset these next 2 1/2 months known as ``the Busy Season.'' If you want every dollar you're due, plan on doing the grunt work yourself -- or face a tax preparer's bill that could wipe out your savings.
``Is it worth potentially wasting hours of time for $30 on a tax return?'' Steve Yukelson, a certified public accountant in Westlake Village said, only half-joking.
Sharon Kreider, a Sunnyvale CPA, said she was relieved when the first client she met with this tax season said it wasn't worth the hassle to document an estimated $100 refund.
``The guy said, `I'm not bothering. It's not worth it,' '' Kreider said. ``Now watch, the next one will make me go back for $23.''
Author: Mark Schwanhausser
Source: http://www.mercurynews.com/
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