This information is for individuals who will file a business Schedule C, E, or F and want to know if they are eligible to request a federal telephone excise tax refund and, if so, how to request the refund.

More information can also be found on the IRS Web site at Telephone Tax Refund or in the income tax return package. The Web site is available 7 days a week.

The telephone excise tax refund is a one-time payment that eligible taxpayers can request on their 2006 federal income tax returns. The credit gives back long-distance federal excise taxes paid in previous years.

Specifically, if you paid long-distance taxes on a land line, cell phone, Voice over Internet Protocol service, or bundled services, for which you received a bill for any period from March 1, 2003 through July 31, 2006, you are eligible to request a telephone excise tax refund.

Use your tax year 2006 income tax return to request your refund. When you fill out your tax return, you'll see a line titled "Credit for Federal Telephone Excise Tax Paid" in the payments section of the Form 1040 and 1040NR. All you need to do is enter the amount of your telephone excise tax credit on this line.

There are three options you can use to figure out how much refund to request.

The first option is to use the standard amount. For many taxpayers it may be faster and easier to use the standard amounts based on the number of exemptions you are claiming. These amounts are:

• $30 if you are claiming one exemption
• $40 if you are claiming two exemptions
• $50 if you are claiming three exemptions
• $60 if you are claiming four or more exemptions

If you chose this standard amount option, there are no additional forms to complete. This option covers both your business and personal refund request. Simply enter your request on the "Credit for Federal Telephone Excise Tax Paid" line. You will not need your old telephone bills because we will not require you to produce any documentation of the amount of federal telephone excise tax you paid when you choose a standard amount.

The second option is to request the actual amount of refundable telephone excise tax you paid. For some taxpayers this option may be beneficial, and you can request a refund of actual taxes paid on both your personal phone expenses as well as your business phone expenses. If you choose this option, you will need Form 8913 with the instructions. The Form 8913 Instructions list all the steps required to request the refund using this option. You will need the amount of telephone excise tax you paid from each of your telephone bills for the 41 months from March 2003 through July 2006. You will then need to determine what portion of the tax you paid is on long distance or bundled service. If, after reviewing the instructions for Form 8913 and looking at your telephone bills, you still have questions about how to identify the excise tax paid on long distance or bundled service, you will have to contact your telephone service provider for assistance. Finally, you must use this information to complete the Form 8913 and submit the form along with your income tax return.

You can use the third option, an IRS-approved estimation formula, if you don't have all of your telephone bills, but know the amount you paid for telephone service and if the combined gross receipts from all of the business for which you are filing exceeds $25,000. If you choose this option, you will need a Form 8913, copies of your April 2006 and September 2006 telephone bills, the amount you paid for telephone service from March 1, 2003 through July 31, 2006, and the number of employees you had as of the second quarter of 2006. The instructions for Form 8913 contain detailed information on how to figure the refund using this option. This option allows you to include the amount of taxes paid on your personal phone service in your refund request. You will need to submit Form 8913 along with your income tax return.

Whichever option you choose, you may request only one credit on your individual return, which covers both your household and business.

Copies of forms and instructions you will need may be downloaded for printing from the IRS Website or ordered by calling 1-800-829-3676.

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