From: "Rich Gauszka" 

Snopes says this one is true. Nothing like being taxed to fund the
Spanish-American War :-)

http://www.snopes.com/business/taxes/excise.asp

Origins:   In November 2006, the snopes.com inbox began filling with
forwards about a tax credit available in 2006 for overpayment of a federal
tax charged on phone calls. For once, an Internet forward is on the
up-and-up; there really is such a credit available to taxpayers filing
their federal 2006 returns (which most people will submit to the IRS in
2007).

The tax in question, the Federal Excise Tax, was first imposed in 1898 to
help fund the Spanish-American War. One of the things it taxed was
telephone service, which at that time was something only the very wealthy
had, so this levy served as a luxury tax charged only to those who could
easily afford it.

The war ended and the bills for it were settled up, but the tax stayed in
place. Over time, as telephone use spread to the masses, what had begun as
a charge against the very wealthy for a frippery they could easily have
done without became a charge against just about everyone for a service that
had come to be regarded as vital.

The tax was levied against charges accruing to long distance calls, which
until recently were primarily determined by a formula based on call length
and the distance between conversing parties. That mode of establishing the
price of calls has mostly been supplanted by the practice of basing long
distance charges on minutes alone, with no regard to the physical distance
the calls travel. Opponents to the tax asserted that that shift made the
tax invalid, and the courts finally agreed with them.

In May 2006, after losing a series of federal court cases, the Internal
Revenue Service said it would no longer collect the 3 percent tax and
ordered telephone companies to stop charging it by 1 August 2006.

Taxpayers are eligible to claim a refund of the long-distance tax billed
for any phone service (cell, fax, computer or land line) in the 41-month
period from 28 February 2003 through 31 July 2006.

On its web site, the IRS explains the refund and how to apply for it.
Additional information can be found by following the links offered on its
Telephone Excise Tax page.

http://www.irs.gov/newsroom/article/0,,id=161506,00.html

http://www.irs.gov/businesses/small/article/0,,id=160214,00.html

In a nutshell, rather than ask everyone to comb through their phone bills
for that 41-month period to add up all the tax collected and then submit
claims for those amounts, the IRS will offer taxpayers standard refunds of
between $30 and $60 (the amount depends on the composition of the
household) that they can apply for simply by entering the refund amount
appropriate to them on a particular line on their 2006 tax returns. Those
who wish to go it the long way by adding everything up to emerge with the
precise figure owed them may do so, but in their case applying for the
refund will require them to complete and file Form 8913 with their returns.

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