It’s hardly ever difficult for the Internal Revenue Service to refund taxpayer money — except if you’re talking about the Telephone Excise Tax Refund (TETR).

Unclaimed millions are still waiting for small businesses to file the paperwork, according to a Treasury Inspector General’s report.

The document shows that only 720,000 businesses have filed, claiming $876.6 million from the $5 billion collected. An estimated 15.9 million business taxpayers are affected by what is being called “the most far-reaching tax refund in IRS history.”

“While the process isn’t really complicated, businesses have to prove they actually paid the claim amount,” said Jonathan Chandler of Padgett Business Services.  “Record-keeping is not a big priority, especially for many African-American businesses. And if they have the records, they don’t feel it’s worth their time to go back and dig through them to find what they need.”     

The (TETR) is a one-time payment available on the 2006 federal income tax return. It refunds the taxes collected on long-distance services billed between Feb. 28, 2003 and Aug. 1, 2006 – a 41-month period. Most phone customers, including cell phone users, are eligible for the refund.

Locally, thousands of small business owners simply chose not to file the claim, but it’s still not too late, and it’s “really not as difficult as it seems.”

“There’s a simple way for small businesses to make the claim,” said Chandler. “Contact the phone service carrier used during that period and request a billing printout. It will cost a few dollars.  And just submit an amended 2006 tax return along with the phone records. That’s all there is to it.”

A business accountant or tax preparation service can do the work, or a business owner may opt for a do-it-yourself approach.

 “Probably, thousands of small businesses in West Tennessee have money coming to them,” said Chandler. “It would be difficult to come up with a precise number.  But the corporations we filed taxes on – even some of the larger ones – just didn’t bother with it. They told us, ‘Don’t worry about it.’”

Whether it’s $100 or several hundred, small businesses – particularly African-American businesses – should claim every dollar coming to them.

“African American businesses only use between one and three phone lines,” said Chandler. “We don’t often need more than that. But whatever the refund amount is from those few lines, it’s better in the business owner’s hands than in the IRS treasury. And that’s where the money is going if no one claims it. It’s yours, and it’s just sitting there. Get it back.”  

The TETR was also made available to individuals, but the process was simpler, said Chandler. For individuals claiming the refund, a standardized table was devised according to the number of exemptions. IRS records show that 99 percent of individual tax filers requesting the TETR used the table rather than actual phone records.

“If you claimed one exemption, $30 was refunded,” said Chandler. “An additional $10 was added for each additional exemption. Four exemptions are worth a refund of $60. Business claims were designed differently to safeguard against abuses. An exorbitant amount being claimed has to be proven through business phone records.”

According to IRS instructions, businesses can submit phone records, or they can review their phone bills for two months and use a special formula to calculate the refund. Whichever method affords the greatest refund amount may be used.

Form 8913, “Credit for Federal Telephone Excise Tax Paid,” must be filled out and attached it to the amended 2006 tax return: Form 1120, 1120S, 1065, or 1042. Instructions for each form will contain information about filing an amended return.

Non-profit business entities, including churches and charities, must fill out Form 8913 and attach it to their amended Form 990-T.

For amended 2006 returns filed after April 17, 2007, the appropriate “interest factors for corporations” should be used.

The refund may not be requested on 2007 tax returns. If businesses or individuals used a pre-paid phone card service during the specified period, they are ineligible for the TETR.

For additional information, or to make specific inquiries, call IRS at (800) 829-1040, or contact Jonathan Chandler at (901) 572-1812.

Also visit the IRS Website at: www.irs.gov.