HOT OFF THE PRESS: THE IRS JUST ANNOUNCED CALCULATIONS FOR FEDERAL EXCISE TAX REFUNDS

This year, your federal tax return will have new line items for telephone usage – to calculate the amount the IRS owes you! Not vice versa!

On November 16, 2006, the IRS finally issued a simplified formula for businesses to calculate their federal excise tax refunds. This calculation will be part of your 2006 federal tax forms.

In our summer e-newsletter, Cory Communications announced the IRS decision to repeal the 100 plus year old excise tax and provide refunds for long distance calls made after February 28, 2003 and before August 1, 2006.

Now, we want to be among the first to brief you on the formula to determine your refund.

The detailed calculations and answers to many questions are on the IRS Website. We advise you to consult this site.

The refund formula is simple, and we’ve tried it ourselves.

Here’s a short description for business calculations.*

1. Review your April 2006 phone bill.
2. Determine the percentage of your bill that is attributable to the excise tax by dividing the total federal excise tax into the total bill.
3. Review your September 2006 phone bill, and perform the same calculation. The September percentage should be lower, because the current federal excise tax is based only on local calls.
4. Subtract the September percentage from the April percentage to learn the percentage of the tax that applied to long distance calls.
5. Determine your total phone usage for the 41-months that constitutes the refund period: after February 28, 2003 and before August 1, 2006. (The IRS website explains that you can also base your calculation on the amounts you reported as business-related telephone expenses on your tax returns for tax years 2003 through 2006, prorated for the 41-month period.)
6. Multiply your 41-month phone usage by the percentage that represents the long distance federal excise tax (calculated in #4 above).
7. Unless your refund is capped* (see the IRS website), this is the amount of your refund!

Monthly phone bills averaging $200 will earn companies roughly a $75.00-$100.00 refund.*

If your monthly phone bill averages $1000.00 the refund amount could be $325.00 - $425.00.*

For those who want professional assistance, as most Cory customers will, Cory strongly advises asking your accountant.

You may be approached by consultants offering to calculate your refunds. Cory believes that it’s risky to rely on guidance from professionals who are not certified to understand and abide by tax regulations, as your accountant is.

Cory Communications is extremely supportive of this tax repeal. We urge all of our clients to take advantage of the refund you are owed when filing your 2006 tax returns.

If you would like further information, or to be directed to an accountant who is knowledgeable about the federal excise tax refund calculation, please call us at 1-877-489-8186 or send an email to info@corycommunications.com.

*Subject to caps based on employee size. Please refer to the IRS Website. (www.irs.gov )

FREE 411 SERVICE SAVES AMERICANS MILLIONS

If you’re tired of directory assistance charges creeping onto your phone bill, you can eliminate them altogether by dialing 1-800-FREE411.

This free service, introduced last year, has transformed the $7.4 million directory assistance industry seemingly overnight.

Since its inception, FREE411 has saved Americans more than $120 million, and this amount is growing.

Today, traditional directory assistance rates run between $1 and $2 per call, due to price increases in the last 2 months alone by major carriers ranging from $.16 - $.50.

As word of mouth has spread about FREE411, usage of the free service has grown dramatically. In fact, New Jersey has the 7th highest usage in the nation, above New York.

With 1-800-FREE411, callers may hear a brief marketing message with the ability to respond, and then continue with their information request – all at no cost whatsoever.

Cory Communications is always looking for ways to save our clients on telecom charges. FREE411 is one way to save – and essentially do away with an entire category of calling charges.

If you have questions on reducing your telecom charges, please call us at 1-877-489-8186 or send an email to info@corycommunications.com.