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Airlines and IRS Clash on How to Refund FAA Ticket Tax

August 9th · No Comments

Travelers who purchased tickets prior to the removal of FAA taxes after the government failed to fund the agency are entitled to a refund according to the Internal Revenue Service. The IRS has instructed airlines, who are not required by law to do so, to dispense the refunds to customers who submit the necessary forms. The airlines are unsure why the IRS is making them handle the refunds when tax payments are traditionally instantly considered monies of the Treasury Department. According to the Air Transport Association, which represents dozens of airlines, its not the responsibility of airlines to get refunds to customers. It’s the duty of the IRS.

The result has been a series of mix messages sent out to the public. The IRS is telling citizens to approach their respective airlines for the way to get back their tax payment. Airlines are telling customers to go to the IRS. In the middle, are a number of unhappy individuals who just want the money entitled to them by law.

The mishap occurred as congress failed to continue funding the Federal Aviation Administration prior to the August recess. After President Obama pleaded with congress to not let 4,000 workers employed by the FAA be left with uncertain fates, congressional leaders returned to restore funding to the federal agency. However, for the brief time in between, the FAA was not being funded and therefore taxes typically applied to airline ticket purchases were removed. The resulting action on the part of the airlines was to make up for the price difference with increased fare charges.

The IRS is currently attempting to establish a dedicated means for customers to get their tax refunds through the government agency’s website. They apparently have to sort out the complications of having no paper trail for electronic ticket purchases. It’s for this reason and the simplicity for airlines to track customer records that the IRS is currently asking airlines to handle the refund and for customers to try to reach an agreement through the airlines before submitting paperwork to the IRS.

The government might be borderline broke, but bureaucratic bedlam never takes a break.

Filed Under: Money Tips