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Tax Information With A Mother's Touch
Published by Eva Rosenberg, MBA, EA
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Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA |
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 » From: Providence, RI Dear TaxMama: I have just discovered that I'm giving away money, perhaps as much as hundreds of dollars per year without realizing it. It is hidden in my telephone bills, regular and cell, and is explained by ATT as follows on their website: "In May of 1997, the Federal Communications Commission (FCC)adopted rules that mandated that telecommunications carriers pay into a federal program called the Universal Service Fund (USF). This fund helps provide affordable telecommunications services for low-income customers and customers in rural areas. It also provides discounts on Internet access for eligible schools, libraries and rural health care providers. The USF is collected from telecommunications carriers and administered by the Universal Service Administration Corporation. They are responsible for disbursing the funds according to eligibility criteria established by the FCC. AT&T's USF expenses are over a billion dollars a year. In the competitive industry we are in, we cannot afford to absorb the costs associated with the USF that have been imposed on AT&T. Therefore, recovery of our expenses is necessary. In July 1998, AT&T began assessing a separate monthly charge on each residential customer's bill called the "Universal Connectivity Charge". Effective July 1, 2002, this charge will change from 11.5% to 11% of your state-to-state and international long distance charges as well as any service charges. AT&T will continue to change the Universal Connectivity Charge from time to time, so that we can continue to recover our Universal Service Fund expense contribution. Every telecommunications carrier in the industry must contribute to the USF. All major telecommunications companies are recovering their USF contribution from residential customers through a separate charge. Most major carriers are charging it as a percentage of their customers' long distance charges and the amount of the percentage charge does not vary significantly among the major carriers. The money collected from this charge enables AT&T to recover its Universal Service Fund expenses and is intended to simply recover our costs. This fee will not be waived except for those customers enrolled in the AT&T Lifeline Program. Customers who choose not to pay the charge will be entered into our normal collections process. If at such time the method and/or amount of AT&T's expenses for the Universal Service Fund changes, we will adjust our policy and charges accordingly." My view is that I am giving involuntarily to my disadvantaged brethren and I should be able to deduct this from my income taxes. ATT says it's part of the cost of doing business (for them, yes, but not for me!) and they wash their hands by asking customers to consult with IRS or a pro. Since you advocate NOT calling the IRS, I'm wondereing if you have an opinion. If so, I would regard it as an opinion that is not for attribution. I am retired, living on fixed income and do my own uncomplicated taxes - but I do itemize as property taxes are high where I live. Thanks for your help. Jack  Dear Jack, I found your idea very intriguing and asked my team of tax pros this morning. » Here's my opinion and my one concern: Well, what do you think? Is he right? Have we been overlooking a valid deduction? After all, we do pay those bills. They do go for charitable purposes. But, are payments to utilities, who are not charitable institutions, deductible as charity? A tax pro said: » What an excellent question!!! The FCC, as a unit of the U. S. government would certainly be a non-profit (but not 501(c)3). A taxpayer might take the position that the payment is to AT&T as a conduit to the FCC, and, thus, deduct the payments. The taxpayer must understand this is not absolutely and clearly deductible, that it could be challenged by IRS, and the deduction may be disallowed. As long as the amount is under, say, $250 a year, it may be more moral victory than actual $$$ in the bank, but it would be easy to do it! I won't name the Pro, since I don't want anyone to become liable for voicing their opinion. ;~) If you follow the concept along the lines of the voluntary contributions you make, via payroll deductions, to the United Way, we've got a precedent. Only, before taking the deduction, make sure, that somewhere, it spells out that the funds are going to a non-profit organization. Then, scour ALL your utility bills. There may be some significant deductions for funding for the elderly, low-income and handicapped on ALL the gas, water, electric, etc., as well as the phone bills. Just an aside folks, if you're being audited and your charity documentation comes up short - try adding this in and see what they say. You'll get an immediate response or ruling. I'd love to hear from you if IRS accepts it. Good luck with the deduction! Best wishes, Eva Rosenberg Your TaxMama  |
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| Library of Congress - ISSN 1532-0790 Copyright © 2000-2003 - Eva Rosenberg |
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