Many Not Taking Advantage of IRS Phone Tax

WASHINGTON (AP) -- The IRS appears to be having trouble giving money away.

Investigators say taxpayers only collected about half of the 8-billion-dollar phone tax refund the Internal Revenue Service expected to hand out this year in the most far-reaching refund in IRS history.

After losing several lawsuits disputing the legitimacy of the tax, the IRS instituted a program to refund the 3 percent tax paid on long distance or bundled service from March 2003 to July 2006.

The tax agency estimated that the one-time refund would affect between 145 million and 165 million individual taxpayers, including many who normally do not need to file tax returns.

But according to the Treasury Inspector General for Tax Administration, the IRS had repaid just over half of the overcollected tax as of August.

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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