The U.S. Court of Appeals for the Federal Circuit today affirmed a grant of summary judgment for the government in an action for refund of federal communications excise tax.
The case is: 8x8, Inc. v. United States, 2016-1959 (Fed. Cir. April 27, 2017). Read the Federal Circuit’s decision [PDF 126 KB]
The company was a provider of local and long-distance telephone services over a broadband internet connection by means of “voice over internet protocol” (VoIP). It filed a claim for refund of more than $1 million of section 4251 federal communications excise tax, which was disallowed by the IRS. The company filed a refund suit in the U.S. Court of Federal Claims, which granted the government’s summary judgment motion and denied the company’s claim for refund.
The Federal Circuit today affirmed, noting that the company, as a “collector” of the excise tax, did not bear the economic burden of the tax. Because the company neither repaid the collected tax to its customers, nor obtained their consent to the claim for refund, the company did not have standing as a matter of law to seek a refund of the excise tax paid by its customers.
© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.