November 18, 1998
Businesses Have More Time
to Begin Electronic Payments
WASHINGTON - The Internal Revenue Service announced it will
waive penalties on businesses that timely use paper federal tax
deposit coupons while converting to the Electronic Federal Tax
Payment System (EFTPS). This penalty relief will run through June
30, 1999. It applies to all taxpayers required to enroll in EFTPS
and deposit electronically starting July 1, 1997, or later.
Over 2 million taxpayers are now enrolled in EFTPS. The IRS said
that electronic tax payments of over $1.6 trillion have been made
"We are offering further penalty relief as we work to increase
participation in this electronic payment program," said Commissioner
of Internal Revenue Charles 0. Rossotti. "We will continue to focus
on outreach efforts with tax practitioners, the business community
and individuals to emphasize the many advantages of EFTPS."
The IRS reminded businesses that they must still make their
deposits on time, even when using paper coupons, or run the risk of
a late deposit penalty. But today's announcement means that the
additional 10 percent penalty for not depositing electronically will
be waived through June 30 of next year.
The IRS encourages businesses to use EFTPS and begin to get
comfortable with it. Making EFTPS payments successfully will show
businesses that they are correctly enrolled and that their payments
can be processed without error.
With EFTPS, tax payments are easy, convenient and accurate. The
taxpayer directs what tax information and payment instructions will
be transmitted. No government agency or outside party has
unauthorized access to a taxpayer's account or company information.
The technology is the same as automatic bill payment or debit card
payments for groceries.
Traditionally, businesses have used paper coupons and checks to
make Federal Tax Deposits, or FTDs. EFTPS eliminates most of the
paperwork in this coupon system. With EFTPS, businesses may make
their deposits by telephone or personal computer or through their
financial institutions. This means no more trips to the bank to
deliver FTD coupons and checks.
Taxpayers who are not required to make deposits electronically
have a special advantage. They can timely deposit using the paper
coupon or electronically without incurring an avoidance penalty.
For information on EFTPS or to get an enrollment form, call
EFTPS Customer Service at (800) 555-4477 or (800) 945-8400.
Taxpayers can begin using EFTPS as soon as they receive their
payment instruction packet and personal identification number.
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