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Tax Credit Consulting: Federal Excise Tax Credit Conway AR

The Excise Tax has a long history. It was started in response to the Spanish American War and although it is commonly considered to have been in force since that time, the truth is that it has been repealed and reinstated several times. It has been closely associated with various wars. In other words, it is reinstated to raise revenue during time of war and then was repealed when peace returned.

Jackson Hewitt
(501) 336-8686
625 Salem Road
Conway, AR

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Liberty Tax Service
(866) 871-1040
1780 Old Morrilton Hwy
Conway, AR

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H&R Block
(501) 679-7080
57 S BROADVIEW STE 102
GREENBRIER, AR

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Jackson Hewitt
(501) 834-3636
8611 Hwy 107
Sherwood, AR

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Liberty Tax Service
(866) 871-1040
3901 E Kiehl Ave # H
Sherwood, AR

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H&R Block Inside Oak Street Shoppes
(501) 327-0565
855 E OAK ST STE B
CONWAY, AR

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Jackson Hewitt
(501) 764-0101
1008 East Oak Street
Conway, AR

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Jackson Hewitt
(501) 796-3940
1122 Main Street Ste 11
Vilonia, AR

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H&R Block
(501) 835-4247
4101 E KIEHL AVE
SHERWOOD, AR

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Tax Ladies
(501) 834-6280
3415 E Kiehl Ave Ste 3
Sherwood, AR

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Tax Credit Consulting: Federal Excise Tax Credit

Federal Excise Tax Credit

The Federal Excise Tax Credit was the result of a long standing court case against the IRS concerning the Excise Tax on long distance telephone service.

Federal Excise Tax Credit

The Excise Tax has a long history. It was started in response to the Spanish American War and although it is commonly considered to have been in force since that time, the truth is that it has been repealed and reinstated several times. It has been closely associated with various wars. In other words, it is reinstated to raise revenue during time of war and then was repealed when peace returned.

The tax was levied in part on communication services. It was imposed in recent years on telephone bills and was based in some part on the length of a call and the distance between callers. The tax was added to a person's telephone bill and paid by the telephone company to the Government using Form 720 which was a quarterly Excise Tax return. For the most part, people were unaware of the tax. It was just another small item on their telephone bill month after month.

The objection came when telephone service providers began to change how they charged for telephone service. Distance between callers and length of the call was not always the determining factor in telephone billing. The Excise Tax was considered to no longer apply. It took several years of debate in the Courts before the IRS eventually gave in and the Excise Tax on telephone bills was stopped as of the summer of 2006. This led to a one time Federal Excise Tax Credit in 2006.

The Credit could be claimed in two ways. The easy and more common method was to just take a standard credit. This credit could be taken on line 71 of Form 1040 and a similar line was available on Form 1040A. The Credit was determined by the number of exemptions that the taxpayer was entitled to claim. A single person with no exemptions could claim $30. This went up in $10 increments. Two exemptions could claim $40. A taxpaye...

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