The Risk of Refusing to Pay the Phone Tax
Refusing to pay the federal excise tax on your local phone bill is an act of civil disobedience. It is an act of noncooperation with authorities in the tradition of nonviolent activists such as Henry David Thoreau, who refused to pay taxes for the Mexican War; Gandhi’s Indian “Salt Marchers,” who refused to purchase British-produced and mandated salt; and the hundreds of thousands of U.S. citizens who refused to pay their federal phone tax during the Vietnam War.
The risks of this particular act of civil disobedience are minimal, primarily because the individual tax amounts involved are small.
What the IRS Can Do
- You may receive letters or “bills” from the IRS for the small amounts due, which will include interest and penalties added to the original amount you resisted.
- The IRS has the power to pursue collection, but because the amounts are small, the efforts to collect the tax are much more expensive than the lost revenue itself. In recent decades the IRS has not pursued collection for small amounts due.
- Even if the IRS does collect, the amounts — even with interest and penalties — are too small to hurt anyone economically.
- You are most likely to spend more time “educating” phone company employees about war tax resistance than in dealing with the IRS (see next section below).
- You will feel good about taking this small step to cut off the money for war.
Will My Phone Service Be Disconnected?
Generally, your phone company cannot legally disconnect your phone service for nonpayment of the tax. IRS regulations (Code of Federal Regulations, sect. 49.4291-1, title 26) clearly state that the phone company is supposed to collect the tax, but has no power to enforce collection. Their role is only to report the resister to the IRS. In the past the Federal Communications Commission (FCC<) ruled that AT&T (holding a long distance monopoly at the time) could not cut off phone service to federal tax resisters.
However, it’s hard to tell these days if phone companies are reported the resisted amounts to the IRS or just burying it in their bookkeeping somewhere. Some may not yet be fully aware of their responsibilities, and you may need to explain to the phone company representative you speak with that the company should credit your bill each month and report the refused amount to the IRS. If the amount continues to add up over a number of months, be sure to call the company and ask for it to be credited (ask for a supervisor if the first person you speak with is not helpful).
Telephone companies have a tax office or legal department that should be able to confirm IRS regulations as regards the federal excise tax.
Consider the time you deal with the phone company all part of the resistance effort!
Some companies have established special billing accommodations for war tax resisters and will provide you with a form (others may send you forms for a “tax exempt” status, which are inappropriate in the case of war tax resistance).
Contact NWTRCC if you need help or if your company is threatening to cut off your phone service.