Academic journal article Journal of Accountancy

Phone Tax Appeal Denied: Deadline Looms for Refunds

Academic journal article Journal of Accountancy

Phone Tax Appeal Denied: Deadline Looms for Refunds

Article excerpt

The Court of Appeals for the Federal Circuit (no. 2008-5106) affirmed the Court of Federal Claims' ruling that RadioShack Corp's refund claim for excise tax paid on long-distance telephone service was time-barred by the general three-year limitation period of section 6511 (a). The electronics retailer had argued that because the Code provision applies to any tax "in respect of which tax the taxpayer is required to file a return" the three-year limit didn't apply, since RadioShack had not been required to file a return with respect to the phone tax. (For prior coverage, see "Tax Matters: Court Hangs Up on Phone Tax Refund," JofA, Oct. 08, page 94, tinyul.com/lzelk4.) RadioShack filed the claim in 2006 for taxes paid on phone service 10 years earlier.

The appellate court, like the trial court, said RadioShack's overly literal reading of the statute ignored congressional intent and judicial holdings that indicate that for purposes of applying the three-year statute of limitations, it refers rather to any type of tax for which taxpayers generally must file a return. Therefore, taxpayers cannot claim a longer period in which to file a claim for refund by saying they had not been required to file that particular return for that tax year.

RadioShack's lawsuit was one of several against the tax and was filed outside the administrative regime the IRS eventually set up for limited refunds. …

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