The report by the Treasury Inspector General for Tax Administration (TIGTA) concluded that while 15.9 million business taxpayers would be eligible to receive refunds of telephone excise taxes collected inappropriately by the Internal Revenue Service (IRS), almost 95% did not claim refunds.

The report found that there were a variety of reasons why firms' tax preparers did not claim the TETR. About 35% of preparers surveyed by TIGTA investigators reported that their clients did not qualify for the TETR. Another 44% of the preparers did not claim the TETR on their clients’ business tax returns because they believed that the amount of work and associated fees expended to compute the refund amount were ultimately not worth the refund. Another 20% of the preparers either forgot to claim the TETR for their clients or were not aware that the TETR was available to businesses.

The TIGTA survey also indicated that a high percentage (27%) of the preparers who did not compute the TETR due to the cost involved were not aware that the IRS had offered a simplified (estimation) method of computing the refund.

TIGTA described the TETR as the most wide-ranging tax refund in the history of the IRS. The agency estimated that between 145 million and 165 million individual taxpayers qualified for the refund.

The 3% tax on long-distance telephone services was first imposed in 1898 to help pay for the Spanish-American War. However, the IRS was forced to stop collecting the tax in 2006 after decisions in five federal appeals courts holding that the tax does not apply to long-distance service as it is billed today.