No refund to "collector" of excise tax | KPMG | QA

No refund to “collector” of excise tax on communication services

No refund to "collector" of excise tax

The U.S. Court of Federal Claims granted the government’s motion for summary judgment, concluding that a provider of “voice over internet protocol” (VoIP) was not entitled to a refund of the excise tax imposed under section 4251 on certain communication services because the company—as a “collector” of the taxes—neither repaid the amount of the tax to its customers nor obtained their written consent under the provisions of section 6415(a).


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The case is: 8x8, Inc. v. United States, No. 13-487T (Fed. Cl. February 29, 2016). Read text of the decision [PDF 215 KB]


As the claims court concluded, under section 6415(a), a collector may obtain a refund from the IRS only if it has repaid the amount of the taxes to the person(s) from whom the taxes were collected or has obtained that person’s consent to receive the refund. The company in this refund action did not satisfy either condition. Moreover, the court found the company did not bear the economic burden of the tax.  

The Court of Federal Claims held that the services that the company provided to its customers were not similar to pre-paid telephone cards, and even if they were, the company still would not be entitled to a refund because it did not pay the taxes for which the refund was sought—it collected the taxes.

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