Thursday, January 12, 2006

The other shoe boot drops on the IRS re the telephone tax.

Here's a first -- a class action lawsuit filed against the IRS! This could be fun...
A potentially enormous class-action suit has been filed against the government on behalf of corporations and individuals who have paid the telephone service excise tax on flat-rate, long-distance services for which the charges did not vary by both the distance and duration of a call.

The complaint, which was filed January 10 in the Court of Federal Claims by the law firm Baker & McKenzie on behalf of RadioShack and an unnamed class of corporate and individual taxpayers, alleges that the government has illegally collected and retained between $4.8 billion and $9 billion in overpayments of the telephone service excise tax...

The class of plaintiffs in the complaint would be immense, covering all corporate and individual taxpayers who erroneously paid the excise tax on flat-rate services, not just those who have filed refund claims....
[Tax Analysts]
Ten courts, including three federal Courts of Appeals, have ruled the long-distance telephone tax to be illegal as typically collected by the IRS. The IRS has won zero cases (one at trial, overturned on appeal). The IRS itself has said in court that $9 billion of tax refunds are at stake. And it has stonewalled, refusing to pay refunds and insisting that phone companies still collect the tax.

But in a nation so hyped about taxes, so far as I know this blog has been the one and only public news source covering this story. Nobody seems to care about a real tax cut, as opposed to a politically argued one -- or about the government's real stonewalling of the courts, as opposed to fantasy stonewalling when some hot button political issue of the moment involved.

Well, a class action lawsuit against the IRS filed on your behalf -- as well as on the behalf of every newspaper and TV station in American -- may finally get some public interest!

Here's more information on recent developments (such as the phone companies taking the tax off of phone bills upon request) and legal explanations and court citations.