Item 8.01 Other Events

On August 6, 2008, IDT Corporation (the "Registrant") disclosed that, it and the IRS had signed the notices of Income Tax Examination Changes that the Registrant received from the IRS in June and August 2008 (the "Notices"). The Notices claimed that, for the period covered by the review, the Registrant owed approximately $75 million in taxes for the period ending July 31, 2001 and approximately $1 million for adjustments carried forward to the years 2005 and 2006 (which amounts do not include applicable interest).

On August 27, 2008, the Registrant disclosed that it had received a Notice of Tax Due from the IRS setting the interest owed on the obligations set forth in the Notices at approximately $39.5 million. Through the date hereof, the Registrant has paid to the IRS an aggregate of $50 million in respect of the obligations set forth in the Notices.

On December 8, 2008, the Registrant and the IRS entered into an installment agreement whereby the Registrant has agreed to pay $55 million of the remaining $67 million owed to the IRS by mid-February, 2009 and the remaining balance by mid-June, 2009. Interest and penalties will continue to accrue on any unpaid amounts.

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