Alabama taxpayers receive extra filing time

Published 12:00 am Tuesday, February 13, 2007

DEMOPOLIS &045; Alabama taxpayers will have until Tuesday, April 17 to file their 2006 Alabama returns and pay any tax due.

State Revenue Commissioner Tom Surtee authorized the extra filling and payment time to allow the 2006 Alabama return filing payment and deadline date to coincide with the recently announced April 17 federal tax filing and payment deadline.

A new form for telephone excise tax refunds is just one of the many &8216;what’s new’ for the 2007 tax filing season. There is also a new refund deposit feature.

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There is a new line on the tax forms for requesting a refund of federal telephone excise taxes paid on long-distance or bundled service over a 41-month period. Taxpayers may request the actual amount paid or may simplify the process by requesting a &8216;standard amount.’ People who don’t need to file a regular tax return may request the refund using the new Form 1040EZ-T.

For the first time ever, taxpayers can split their refunds among up to three accounts held by three different U.S. financial institutions. A new form is used to authorize the split of direct-deposit refunds.

Alabamians who deduct tuition and fees or educator expenses paid in 2006 will have to write-in the deduction if they don’t e-file according to Internal Revenue Service spokesman Dan Boone.

Of the 1.95 million individual tax returns to be filed by Alabamians, the IRS expects 1.31 million of them to be filed electronically. More than 300,000 Alabamians are expected to prepare and file their returns using their own computers.

One area in filing taxes that is missed by a lot of taxpayers in the region is the Earned Income Tax Credit (EITC). Last year more than 470,000 workers in Alabama claimed nearly $1 billion in EITC, but the IRS estimates that to be only 75 to 80 percent of the number who are eligible. Those that have missed out are missing a tax credit of up to $4,536.

There are two reasons people don’t claim the credit. Their income is so low they are not legally required to file a tax return. But you have to file a tax return to claim the credit.

2) Some people who had taxes withheld last year, and their logic is, if they didn’t have anything withheld, they couldn’t get anything back.

A recent Census study found that 4.6 million people, including 2.4 million children, were lifted out of poverty in 2002, thanks to the EITC. The EITC is already the government’s largest cash assistance program targeted to low-income Americans. Many taxpayers are eligible, but fail to claim the credit. The IRS wants all eligible taxpayers to claim this credit.

The IRS is encouraging taxpayers to use a new line on the tax forms to request a refund of long-distance phone taxes they paid, but some filers and taxpayers appear to be abusing that option.

The agency says that early filings show some individual taxpayers have requested large and apparently improper amounts for the special telephone refund.

The IRS is investigating potential abuses in this area and will take prompt action against taxpayers who claim improper refund amounts and the return preparers who help them.

There were a sample of returns checked by the IRS filed through mid-January and found that some individual taxpayers requested a refund of the entire amount of their phone bills, rather than just the three-percent tax on long-distance and bundled service that they are entitled to.

Some individuals are making requests for thousands of dollars, indicating that they had phone bills topping $100,000, an amount exceeding their income.

Some tax preparers are helping their clients file apparently improper requests.

The government stopped collecting the long-distance excise tax last August after several federal court decisions held that the tax does not apply to long-distance service as it is billed today. Federal officials authorized a one-time refund of tax collected on service billed during the previous 41 months. The tax continues to apply to local-only phone service.

Research and contacts with telephone service providers indicated that standard refund amounts, ranging from $30 to $60, based on the number of exemptions claimed on their tax refund, would approximate the eligible amount for most tax payers.