WASHINGTON — The Internal Revenue Service
today announced an incentive to encourage enrollment in and use of the
Electronic Federal Tax Payment System (EFTPS). Approximately 1 million
employers could qualify for a refund of a previously paid federal tax
deposit (FTD) penalty.
The EFTPS-FTD penalty refund offer allows
business taxpayers an opportunity to receive an automatic one-time penalty
refund if they have been assessed a deposit penalty on a Form 941,
Employer's Quarterly Federal Tax Return. The offer is available to employers
who are not mandated to use EFTPS. To qualify for the offer, the employer
must:
•use EFTPS for one year (four consecutive quarters), •make
all Form 941 payments on time and, •have previously fully paid the
penalty. “This approach is a sound business decision for both taxpayers
and the government,” said IRS Commissioner Mark W. Everson. “Using the
electronic payment system is much more accurate and much less burdensome for
taxpayers. At the same time, the government saves money because there are
fewer errors, fewer notices and fewer problems.”
Using EFTPS
eliminates the vast majority of the errors found on paper submissions. These
errors on paper coupons result in late or misapplied payments and an FTD
penalty.
“Paying taxes using EFTPS means almost 20 times greater
accuracy,” said Dick Gregg, FMS Commissioner. “Greater accuracy means fewer
penalties. I encourage individuals and businesses to enroll today and save
time and money.” Beginning in 2005, the IRS will automatically determine
which employers have achieved the four quarters of EFTPS compliance and
reverse the most recent full-paid FTD penalty minus any outstanding taxes.
No other action by the employer is necessary.
The IRS will look back
up to four quarters prior to the four-quarter compliance period for a full
paid FTD penalty to abate. Penalties paid earlier than one year prior to the
four-quarter compliance period are not eligible for the automatic offer.
EFTPS is a free service provided by two bureaus of the U.S. Department
of the Treasury, IRS and the Financial Management Service (FMS). EFTPS gives
businesses, individuals, and tax professionals the ability to make federal
tax payments electronically online, by phone or with batch provider software
for professionals.
Taxpayers can enroll in EFTPS by visiting
EFTPS.gov or by calling EFTPS Customer Service at 1-800-555-4477 to receive
an enrollment form by mail.
EFTPS was introduced in 1996 and since
that time more than 4.6 million taxpayers have enrolled in the system to
make their federal tax payments electronically. In fiscal year 2003, EFTPS
processed more than 68.5 million transactions totaling more than $1.5
trillion. Taxpayers can make payments through a secure web site or by phone
24 hours a day, seven days a week from home or office; schedule payments up
to 120 days in advance (for businesses) and 365 days in advance (for
individuals); and review the last 16 months of tax payment history online or
by calling Customer Service. In addition, taxpayers receive an immediate
acknowledgement number for every EFTPS transaction for easy record keeping
and as proof of the transaction. EFTPS is ideal for all business taxpayers
and for individual taxpayers that make Form 1040 ES quarterly estimated
payments.
Hugh D. Proctor III
Senior Tax Specialist
I.D. # 65-03289
Internal Revenue Service
SB/SE, Taxpayer Education and Communication
1700 Palm Beach Lakes Blvd., Suite 500
West Palm Beach, Florida 33401
Phone/Voice Mail (561) 616-2100 FAX (561) 616-2161
e-mail: hugh.proctor@irs.gov
