n-04-57.pdf

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Part III - Administrative, Procedural, and Miscellaneous

Communications Excise Tax; § 4251

Notice 2004-57

The Internal Revenue Service (Service) has received inquiries concerning the
scope of the communications excise tax imposed by § 4251 of the Internal Revenue
Code. These inquiries were precipitated, in part, by conflicting results in recent
litigation.
Compare American Bankers Ins. Group v. United States, 308 F. Supp. 2d
1360 (S.D. Fla. 2004), appeal docketed, No. 04-10720-EE (11
th
Cir. Feb. 12, 2004) with
Office Max, Inc. v. United States, 309 F. Supp. 2d 984 (N.D. Ohio 2004). This notice
confirms that the Service will continue to assess and collect the tax under § 4251 on all
taxable communications services, including those communications services similar to
those at issue in the cases.

Persons paying for taxable communications services (taxpayers) are required to
pay the tax to a collecting agent (the person receiving the payment on which tax is
imposed), and collecting agents are required to pay over the tax to the United States
Treasury and to file the required returns. Taxpayers may preserve any claims for
overpayments by filing administrative claims for refund with the Service pursuant to
§ 6511.

Failure to pay the tax to the collecting agent may result in the imposition of
penalties, as well as interest.

DRAFTING INFORMATION

The principal author of this notice is Cynthia A. McGreevy of the Office of
Associate Chief Counsel (Passthroughs & Special Industries). For further information
regarding this notice contact Ms. McGreevy at (202) 622-3130 (not a toll-free call).