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Text Box: BY MARTHA BUYER LAW OFFICES OF MARTHA BUYER, PLLC Martha Buyer is the STC’s Regulatory Attorney While I am relatively new in this role, since this fall, I have been able to assist a number of STC consultants with issues that have crossed their desks since the last issue of Lines was distributed. Because several of these questions were raised more than once, I thought that I would address those issues, with the hope that they would be of interest to other members as well. With that in mind, this column will address proposed changes to CALEA, an update on the Federal Excise Tax Litigation and the recent action regarding the provider of BlackBerry devices. CALEA CALEA is the Communications Assistance for Law Enforcement Act, and it has recent received some attention because of some FCC activity earlier this year. Specifically, in response to a petition from the Drug Enforcement Agency, the Department of Justice and the FBI, the FCC determined that providers of some broadband and interconnected VoIP services must be prepared to accommodate law-enforcement-directed wiretaps. With VoIP and other broadband services becoming increasingly prevalent as a source of voice communications, law enforcement agencies felt an acute need for mandated access to communications facilities which were not anticipated

Text Box: when CALEA was originally drafted. Be advised that only broadband Internet access service and broadband telephony service are covered by this ruling. Instant messaging and other wireless communications technologies are not, at this time, covered. Additionally, consultants working with universities who have inquired about new CALEA requirements will be well-advised to stay tuned for updates on the final rules once they are released. A comment period ran through mid-November, and those comments are expected to be published early in the Q1 2006. However, clients who are offering broadband services and who qualify as “carriers” need to be aware that they will need to be CALEA-compliant by Q2 2007. The extent of that compliance is what will be addressed in the FCC’s Final Rule. FET In November, 2005, the latest victory in the battle between corporate consumers and the IRS was won when the initial decision from the initial case, Office Max Inc. v. United States, was affirmed on appeal by the U.S. Court of Appeals, for the 6th Circuit. This latest win has re-ignited interest in the Federal Excise Tax and the possibility of obtaining a refund of the tax on behalf of clients. However, before jumping into this pond, there are several considerations that every consultant should be aware of before presenting the idea of “free money” to his/her clients.

Text Box: This is not a carrier issue. That is, the end user must petition the IRS for a refund of the Federal Excise Tax paid. Even if the end-user (taxpayer) receives a refund, the tax will still be assessed on the taxpayer’s phone bill and subsequent refunds will have be applied for individually. Excise taxes are filed by carriers with the IRS on a quarterly basis. Specifically, excise tax returns must be filed within 1 month after the end of the quarter. This is important to know given that there is a statute of limitations on (ultimate taxpayers) applying for a refund of the excise tax. That is, the taxpayer can only apply for a refund for a period of 3 years from the date that the carrier filed its original excise tax return. After the initial request for refund is filed, additional filings must be made for additional quarters where the excise tax is paid. Be advised that carriers must continue to assess the FET regardless of whether or not a refund has been issued. This is not a carrier issue, but a tax issue. Even if a consultant is “driving” the work, the forms submitted to the IRS must be signed by the same corporate officer who signs, or who has authority to sign, the corporate tax return. Please be advised that the IRS frowns on estimated excise tax amounts paid.Consultants Continued on Page 5 ò