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Tax Filers Could Receive Bigger Refunds

(Video of this report will be available Thursday afternoon in the Full Focus section of the Web site).

Could you be eligible for a bigger tax refund check this year and not know it? The Internal Revenue Service says thousands of California taxpayers aren't claiming the refunds they qualify to get. Full Focus reporter Heather Hill has more on what you should know before filing.

Early filing statistics for this tax season show there are two refunds many people are missing out on -- the first is a one-time long-distance phone tax credit. The second is the Earned Income Tax Credit -- available every year, but often overlooked.

For years, Americans paid a federal excise tax on long distance telephone service. But recently, federal courts ruled the tax unconstitutional and it was repealed. Now there's a special refund to reimburse people for the tax they've paid over the last three years. Eligible taxpayers have the option of claiming a standard refund amount that ranges from $30 to $60 based on filing status, or claiming the actual amount of tax they paid -- which involves a little more paperwork and accurate records. Early estimates show more than 700,000 early filers in California haven't asked for the refund, and that could translate into more than $21 million unclaimed dollars. And IRS spokesman Raphael Tulino says more than likely, you're eligible.

Tulino: To request the long distance telephone excise credit on your return this year, all you have to do to be eligible is to have paid the tax. And many, many millions of us have telephones, either voiceover IP, cell phones or a land line, and on it we have paid long distance federal excise taxes. I would imagine most of us have that long distance service on any one of those kinds of phone services.

A smaller segment of the population may also be eligible for the Earned Income Tax Credit. It's a refund offered to low and moderate-income families who make less than $39,000 a year. Qualifying families with two or more children can get a refund of up to about $4,500 this year -- if they claim it. 

Tulino: But the thing about it is, about 25 percent of eligible taxpayers in general, here locally and nationally, don't claim it either because they think it's too complicated to go through the process, or because they just don't know about it.

For those that may need some help requesting the earned income tax credit, there's a volunteer income tax assistance program that provides free tax preparation at locations throughout the county. A link to information about that program is available on our website.

In addition, people who already filed this year and may have missed out on either the phone tax credit or the earned income tax credit can still claim that money by filing a form 1040-X -- an amended return that's only available in paper form. But IRS spokesman Raphael Tulino suggests waiting until after the April 17th general filing deadline. 

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