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War Over and Temporary War Tax Repealed

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By Chuck



A Little Extra in Your 2006 Tax Refund

Good News! American individuals, businesses and non-profit organizations who have used long distance services on their telephones during the past three years will get an extra refund when they file their taxes this year.

The refund is compensation for the 3% temporary tax that Congress levied on long distance calls in 1898 in order to raise money to pay for combat operations during the Spanish American war. This tax has now been repealed and individuals and households will be allowed to file for a refund of the tax based upon the cost of their long distance phone calls for the past three years.

If you, like most people, have elected not to keep old phone bills for the past three years, don't worry. The IRS has announced that individual taxpayers (businesses and non-profit organizations will face different rules) will have the option or either itemizing the last three years' worth of long distance phone charges and calculating the appropriate refund or they can claim a standard deduction as follows:

For a single filer with one exemption - $30

For a filer with two exemptions - $40

For a filer with three exemptions - $50

For filers with four or more exemptions - $60

As always with taxes, follow the instructions that come with your income tax forms, check the IRS website at www.IRS.gov (see link below) and/or consult your tax adviser.

For those interested in some history, the original tax was one cent on all long distance calls costing 15 cents or more. However, in 1900, two years after combat in the three to four month long fighting phase of the war had ended and the ink long dry on the peace treaty, Congress raised the tax to 3% on the total phone bill. After pocketing this, now sizable, windfall for over a century, the masters of pork in Congress tried a repeat of their 1900 stunt by proposing to expand the tax to the Internet. This little scheme was quickly exposed on the Internet and not only was Congress forced to back off expanding the tax, but suddenly found their century long taxpayer fleecing scheme open to public scrutiny. Caught with their hands in the pork barrel, Congress voted in 2000 to repeal the tax only to have President Clinton, eager to maintain his legacy as being profligate in fiscal policy as well as other areas personal and political, vetoed it. However, the issue refused to die and this year Congress was finally forced to not only repeal the tax but compensate the taxpayers for half of the six years that have elapsed between the first attempt at repeal (which itself was 102 years AFTER it should have been repealed) and this year's successful effort to finally repeal this TEMPORARY tax to fund a four month long war that ended before the dawn of the LAST century.



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