IRS Failed to Refund $4 Billion in Improper Taxes

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The Internal Revenue Service has failed to refund about $4 billion in improperly collected taxes, according to a Treasury Department audit.

The IRS collected $8 billion while an outdated tax on long-distance telephone calls was being challenged in court, according to a federal report that states "a significant amount" of the tax "may never be refunded." As of August, only about half of the $8 billion had been returned to taxpayers.

Further, evidence shows that many people opted to take a refund for less money than they were owed because the IRS paperwork necessary to get a full deduction was too complicated.

"After several court decisions held that the excise tax the IRS was collecting on long-distance and bundled telephone service was inappropriate, the IRS implemented a major program for taxpayers to receive refunds for the portion of their excise taxes paid on these services," the 28-page document notes.

The Treasury Inspector General for Tax Administration (TIGTA) report estimated that up to 165 million taxpayers became eligible for a share of the approximately $8 billion gathered by the IRS after Feb. 28, 2003, and before Aug. 1, 2006, once the Telephone Excise Tax was invalidated in the courts.

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Just in time for Xmas!

[kestrel91316]

1. To the IRS's credit, I just got the bill on my installment agreement and

they FINALLY have quit claiming I owe over $100,000 (:wow: ) and instead have the CORRECT amount still due (a paltry $990). I was right, they were wrong, they have been wrong for over three years. They finally owned up to their error and credited me in full, even taking the penalties and interest off the bill.

My Christmas present to myself this year will be getting out from under them at long last. David has done kilt Goliath.

Oh, and I won my case myself. Never paid an attorney or accountant a dime. And every IRS person I dealt with in person (a total of 3 over the years) was actually really nice and reasonable and polite - I guess they have to be when they have NO CASE.

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2. You are lucky the bill was > 50,000. n/t