The Internal Revenue Service this week began offering tips for requesting the telephone excise tax refund.
Early tax returns show some people are making basic mistakes, others are requesting excessive refunds and many are missing out on the refunds, altogether.
“We encourage taxpayers to take a few minutes and review the details of the telephone-tax refund,” said IRS Commissioner Mark W. Everson. “A little extra time will reduce the chance for a mistake, avoid a refund delay and possibly add a few dollars onto refund checks.”
The government stopped collecting the long-distance excise tax in August after several federal court decisions ruled the tax does not apply to long-distance service as it is billed today.
Federal officials authorized a one-time refund of the federal excise tax collected on service billed during the previous 41 months, stretching from the beginning of March 2003 to the end of July 2006. The tax continues to apply to local-only phone service.
Mistakes found on a sample of 2006 returns filed during January include:
- Filling out the Form 1040EZ-T incorrectly by failing to show a refund amount on Line 1a.
- Failing to request the telephone tax refund on a regular federal income-tax return in situations where the taxpayer appears to qualify.
- Filing duplicate requests.
- Requesting a refund that appears to be based on the entire amount of the taxpayer’s phone bills, rather than just the three-percent tax on long-distance and bundled service.
- Requesting a refund in the thousands of dollars, suggesting that the taxpayer paid more for telephone service than they received in income.
The IRS is investigating potential abuses among early filers who requested large and apparently improper amounts for the telephone tax refund.
CFP board targets wrongful usage of designation
You’re not a certified financial planner until you’re a Certified Financial Planner.
That’s what the CFP Board of Standards Inc. wanted to make clear this week when it issued public disciplinary actions against a number of individuals who apparently listed themselves as CFPs without certification the board.
Disciplinary action was taken against the following individuals:
Henry H. Godbee III of Little Rock, Ark.
Garry A. Estrada of Murrieta, Calif.
Eric C. Howie of Santa Clara, Calif.
William R. Barto of Hockessin, Del.
John T. Carter of Macon, Ga.
Timothy J. Stearns of Arlington Heights, Ill.
John R. Hantz of Southfield, Mich.
Carl P. Kellogg of Ada, Mich.
Christopher J. Jacob of St. Louis, Mo.
Robert M. Ryerson of Freehold, N.J.
Frank P. Grasso of Sayville, N.Y.
Kenneth L. Sojka of New Rochelle, N.Y.
Edward Alan Martin of Franklin, Tenn.
Sidney J. Lorio of Bedford, Texas
Thomas Van Tassel of Sparta, Wis.
The gift of life … insurance
RiverSource Life Insurance Co. has launched a new survivorship universal life insurance policy called Succession Protector that insures two lives and pays out after the second death.
The policy is designed to appeal to finically secure people who have already prepared life insurance plans but wish to purchase policies for others.
Policy beneficiaries will be able to avoid time and costs associated with probate and receive tax-free insurance money.
FDIC extends moratorium for ILCs
The FDIC Board of Directors voted to continue for one year a moratorium on applications for deposit insurance and change in control notices for industrial loan companies that will be owned by commercial companies.
The moratorium does not apply to ILCs owned by financial companies, and the board voted to issue for public comment a proposed rule to strengthen the framework for consideration of applications or notices for industrial banks owned by financial companies not subject to federal consolidated bank supervision.
The comments received during the original moratorium demonstrated that the growth of the ILC industry, the trend toward commercial company ownership of ILCs and the nature of some ILC business models have raised significant questions about the risks to the deposit insurance fund.
With regard to ILCs owned by companies engaged in only financial activities and that are not subject to Federal Consolidated Bank Supervision, the board approved a proposed regulation to provide enhanced supervision to ensure that the parent can serve as a more transparent source of strength to the ILC.
Among other things, the proposed regulation requires that the parent company agree to maintain the capital of the ILC at specified minimum levels and to permit the FDIC to examine or obtain reports from the parent company and its subsidiaries in order to safeguard the continued safety and soundness of the institution.
Currently, 58 ILCs operate in seven states. Eight ILC applications for deposit insurance and one notice of change in control for an existing ILC are pending before the FDIC. Four of these filings will be subject to the continued moratorium and the FDIC will move forward on the remaining five, pending further determination.
Rob Larimer is managing editor of the Colorado Springs Business Journal.