When it comes to giving back taxes, the IRS doesn’t have a clue, or at least it wants to appear that way. In the case of the FAA air transportation excise tax and the domestic segment fees, the IRS has not come up with a method to refund taxes. My latest communication with them confirmed that.
It has been agreed that travelers who already paid for airline tickets that are for flights taking place after July 23rd are due a refund. But no one seems to know with whom to communicate to the get the refund.
Airlines say go to the IRS and the IRS says go to the airlines.
According to the IRS, and just about ever other participant in the drama, passengers who bought a ticket and paid these taxes on or before July 22 for travel on or after July 23 might be due a refund. The question is, how.
As a general matter, the IRS will grant refunds for tax overpayments when people submit documented claims, but it posted a notice on its website last week saying it had “asked the airlines to provide refunds to eligible passengers when requested.”
The IRS noted that because it has “no information about passenger ticket purchases or travel dates, travelers who are unable to obtain a refund from the airline will be required to submit proof of taxes paid and travel dates to the IRS under procedures that are under development.”
To this end, JetBlue has always been handling their refunds this way and now Delta and USAirways announced that they will too. All the airlines will as well since it seems that this is what the IRS wants.
Plus, they can afford to since the current ongressional spat means more than a billion dollar windfall for the airlines. You’d better believe they will be refunding the taxes that don’t apply. They were certainly fast to commandeer the taxes that should have gone back to passengers as savings, but it seems that the airlines have never seen a tax that they don’t like when they can take the money themselves and not give it to the government.
The Associated Press says “the taxes can add up to $60 or more on a $300 round-trip ticket. They stopped when the Federal Aviation Administration partially shut down. Travelers who bought tickets before the shutdown but flew during it are due a refund.”
The Arizona Republic adds “US Airways is working with the Internal Revenue Service to implement the refund, but has not yet decided how it will occur, said Valerie Wunder, a US Airways spokeswoman.”
Delta made a similar announcement on Monday.
Prior to the moves by Delta and US Airways, passengers appeared to have been caught in the middle. Airlines had been telling customers to contact the IRS for refunds, while the IRS in turn had said the refunds should be handled by the airlines.
Getting back $60 to $300 for each trip would sure be nice. Let’s see what happens in the end and what the hassles will be. To be continued.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
