Embarq sues government for $31.6M tax payback

Independent telco Embarq, which is in the process of being acquired by CenturyTel, has filed a lawsuit against the federal government claiming the company is owed $31.6 million in mistakenly-paid income taxes. Those payments occurred quite a while ago, between 1990 and 1994, and apparently happened when Embarq (then Sprint Local) recorded Universal Service Fund payments as taxable income. The company now argues that shouldn't have been the case because the USF payments were "non-shareholder contributions to capital," according to the Kansas City Star. The Internal Revenue Service already has denied Embarq's request for payback.

For more:
- The Kansas City Star has this story

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