SUIT FILED AGAINST PLANS TO REIMBURSE PHONE TAX: A class-action lawsuit has been filed challenging the Internal Revenue Service's plan to reimburse taxpayers for their past three years' worth of long-distance phone taxes.The lawsuit claims that small businesses and low-income taxpayers will be shortchanged, or completely excluded, from the refunds.

In May, the Treasury Department conceded a legal dispute over the tax, after five federal appeals courts upheld rulings that the 3 percent federal excise does not apply to long-distance service as billed today. As part of that concession, the government announced that it would officially end the tax on July 31, and taxpayers would be eligible to file for refunds of all tax, plus interest, that they have paid on long-distance service billed to them after Feb. 28, 2003.

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