My husband does an amazing job filing old bills. So I had no doubt he could dig up more than three years’ worth of MCI bills if we ever wanted to actually calculate a refund on our 2006 federal income tax return for a now-defunct, long-distance phone tax.

My husband found those bills -- or most of them. We quickly concluded that we’re not going to make big money by trying to file yet another tax form.

I doubt whether you would, either. So maybe we don’t need to feel guilty if we opt for the easy out on this one.

Refund based on excise tax

Recently, the Internal Revenue Service announced guidelines for a onetime tax refund based on the old excise tax on long-distance phone service. The refund is available to anyone who paid long-distance taxes on landline, cell phone or Voice over Internet Protocol service.

The federal government lost a series of cases in which courts held that the 108-year-old tax didn’t apply to long-distance service as it’s billed today. The government stopped collecting the excise tax on long-distance service as of July 31.

The IRS refund applies to the excise taxes paid after Feb. 28, 2003, and before Aug. 1, 2006.

To get the easy money, taxpayers only have to fill out one additional line on their 2006 income tax return. You don’t need your old bills. You won’t have to itemize deductions to get this refund.

And if you don’t typically file a tax return because you don’t owe taxes, you’d want to file what’s called a Form 1040EZ-T to get the phone refund.

The standard refunds are:

• A maximum refund of $60 for a family of four or more.
• A $50 refund for a family of three.
• A $40 refund for two.
• A $30 refund for a single filer.

«It’s going to be based on the number of exemptions you’re claiming on your 2006 tax return,» said E. H. Rubinsky, tax analyst for RIA, a provider of tax information and software to tax professionals.

«They’re trying to simplify this.»

The IRS said the standard amount is based on telephone usage data and reflects the tax paid by similar-size households.

The most recent rate for the excise tax was 3%.

Then again, individuals who think they’re being shortchanged also have the option of calculating the tax by finding their old bills and filling out the new Form 8913.

But because the IRS refund applies to the excise taxes paid dating back more than three years, filers would potentially need to dig up 41 months of old phone records.

Many tax experts suggest that consumers simply take the refund money on the table and skip the scavenger hunt for old bills.

«Leave that garbage bag at home, where it belongs. Don’t bring it to my office,» joked James Jenkins, president of Jenkins & Co., a tax firm in Southfield.

Paperwork hunt

To check this out, I looked at our old bills.

My husband and I have our long-distance service through one carrier. Our local service is through another carrier. So we needed only the long-distance bills from MCI.

But it helps to eyeball a few bills to see what kind of taxes you’ve been paying.

At our house, we’d get $50 without digging up any bills. That’s the standard refund for two parents and one child.

The actual excise tax?

A random look at our bills showed that we paid anywhere from 35 cents to 55 cents a month from 2003 through the time the tax expired.

For example, we paid 55 cents for the tax on our long-distance bill in June 2006. That bill totaled $21.17.

Say we even paid 60 cents a month each month for 41 months, we’d still be talking about only $24.60 in excise taxes.

The standard refunds start looking more reasonable.

Yes, the tax refund includes some interest. But we’re also talking about extra work digging up bills -- and filling out forms.

Certainly, there are exceptions.

If you’re single and someone who uses long-distance a lot, you might come up with a bigger refund on your own.

Or if you have more than one phone service, say, long-distance service for a landline and cell phone service, you might be able to get a bigger refund by finding your old bills, said Maggie Doedtman, tax advice manager for H&R Block in Kansas City, Miss.

But in most cases, don’t waste your time digging.

Telephone tax refunds

• Businesses and nonprofits are required to base their telephone tax refund on the actual amount of the tax paid. The IRS last week said it is continuing to work on a reasonable method for estimating those
• Remember, the excise tax continues to apply to local service. The IRS does not refund taxes on local service.
• Individuals are expected to receive about $10 billion in telephone tax refunds next year, economists at the U. S. Department of Treasury say.

ZHU BORU,China Business Weekly staff

The Chinese Government seems unlikely to release regulations on voice over Internet protocol (VoIP) telephony soon, yet the government’s acquiesce leaves much hope that businesses will develop traditional fixed-line telephony rapidly.

«It’s not so optimistic,» Xu Junqi, a researcher of China Academy of Telecommunications Research, a think-tank under the Ministry of Information Industry (MII), told China Business Weekly last week. «MII has yet to put VoIP research on its agenda.»

Xu stated that the institute is only studying VoIP development abroad.

VoIP is an emerging telephony service. It offers PC-to-PC or landline-to-PC telephony services, including local and long-distance calls, at an attractive price.

Long-distance calls made over VoIP can be as much as 70 per cent cheaper than calls on traditional networks.

«It may take some time before the government finds out a way to balance the interest generated by the traditional telephony and VoIP,» said Zhang Ying, an analyst with Beijing-based research house Analysys International.

«The government actually takes a mutual stance on the new technology, leaving its future to how the market grows,» Zhang said.

Concurring, Xu said it is quite similar to the case of personal handy services (PHS), or (xiaolingtong), in China.

«The government will legitimize VoIP as its market penetration grows,» Xu said, «but the market is still in its infancy, and they are watching.»

MII demanded the suspension of VoIP services across the country in September.

China’s fixed-line carriers, China Telecom and China Netcom, launched VoIP business services with local Internet service providers (ISPs) earlier this year, and it expanded rapidly in large cities including Beijing and Shanghai.

Business reached a climax in late August when Beijing Telecom, with ISP Great Wall Broadband, introduced a VoIP service charging only 3 fen (0.36 US cents) per minute.

Even so, China Telecom and China Netcom still can offer long-distance VoIP services, operated under their long-distance licences.

Meanwhile, ISPs are circumventing the regulatory grey area by co-operating with these carriers to run VoIP service.

Chinese mobile ISP Tom Online launched its PC-to-PC VoIP service last month, in partnership with European VoIP provider Skype Technologies.

A Tom Online spokesperson said it was in preliminary talks with carriers to offer VoIP to telephones some time next year.

Other large Chinese ISPs, including NetEease.com and Tencent are making similar in-roads.

«Regulators are giving in to VoIP services as it knows the only way to solve the problems is by doing it,» said Xu.

Experts agree that a major problem is the classification of VoIP; whether to be a basic service or a value-added one.

Most envisage it is a value-added service.

«PC-to-PC VoIP definitely falls into the category of a value-added service, with only ISPs involved,» said Zhang.

Existing regulations are still vague in classifying PC-to-phone VoIP, which entails fixed-line telecoms carriers and ISPs, a grey area for regulation, he explained.

Value-added services are open to foreign investment and are subject to less rigorous licensing procedures than basic services, such as fixed-line and wireless telephony.

Both Zhang and Xu agree that PC-to-phone business should be defined as value-added service.

«VoIP is immature in both technology and business models. It cannot be classified as a basic service,» Xu said.

«The government needs to provide a unified bottom line for charging VoIP to avoid vicious price wars between ISPs if VoIP is classified as a value-added service, which many ISPs are legitimatized to enter,» said Zhang.

Fixed-line carriers are concerned that their declining profit margins in traditional telephony services as VoIP begins to blossom.

«So far, there are little direct clashes between the two businesses,» Zhang added.

Surprisingly or not, the two fixed-line carriers are self-contradictory in their attitude towards the service, said Zhang.

Although they are unwilling to see VoIP eat into its traditional long-distance telephony market, both China Telecom, in the south, and China Netcom, in the north, welcome VoIP service in each other’s turf, he said.

Vincent Fu, principle analyst for Asia-Pacific telecoms of world-leading market research house Gartner, was quoted saying that long-distance calls made over VoIP would grow to 80–90 per cent of the long-distance traffic by 2008, eroding traditional circuit-switch networks share to 10 per cent.

In the United States, where the government is most active in promoting VoIP service, the market penetration is expected to reach 30 per cent within three years, as indicated by a report released by market researcher Mercer.

In Europe, VoIP-based applications and services will account for 13 per cent of the total telephony market in terms of revenues.

Telecoms regulators in South Korea and Japan, however, still remain cautious over VoIP services.