Can the IRS use telephone tax refunds to offset tax debts?
Yes. Like other tax refunds, the telephone tax refund can be applied against other taxes owed by the taxpayer. I am requesting the telephone tax refund on my 2006 business return, and I expect to receive my refund in 2007. Do I have to report it as income on my 2007 return? Generally, yes. Normally, a business taxpayer can deduct the cost of telephone service, including related taxes. Thus, if you later receive a refund of those taxes, you normally must include it, along with any related interest, in your gross income in the year you receive it. Further details on reporting these refunds will be included in IRS publications and tax instructions for 2007. Why can’t the telephone companies pull the information from their databases and provide it to businesses? Many service providers lack easy access to records for the entire 41-month period. In general, they retain about six months of records on-line. In addition, many taxpayers have more than one service provider or have changed provide
