More Businesses Pay Taxes Electronically
Two million business taxpayers have enrolled in an electronic tax
payment system that allows them the convenience of making their federal
tax payments directly from their homes or offices. The Electronic Federal
Tax Payment System (EFTPS) eliminates paper coupons and checks and uses
instead telephones or personal computers to pay federal taxes.
Said by the IRS to be "the easiest way to pay federal taxes," EFTPS
requires no special equipment. Payments by phone take less than five minutes.
If a taxpayer wishes to use a personal computer, free, Windows-based software
is available. Taxpayers can also choose to work through their financial
institutions. Based on specific direction from the taxpayer, tax information
and payment instructions are processed through EFTPS to the government.
No government agency or outside party has unauthorized access to a taxpayer�s
account or company information.
EFTPS is an alternative offered by the Treasury Department to provide
businesses with a simple, integrated approach to managing their tax dollars
and information. Last year, the Treasury collected over $1 trillion through
the system. Approximately 4,000 businesses are enrolling each week.
Two Treasury Department financial agents, the First National Bank
of Chicago and NationsBank, manage the system. These banks enroll people
in the system, provide customer service, direct payments to the government�s
account and provide the tax payment information to the IRS. Taxpayers do
not have to open accounts at these banks to participate. They can authorize
their own bank or the Treasury financial agent to initiate payments for
them. A business that decides to use its own bank should check with the
bank for specific instructions, deadlines and fees for using EFTPS.
Some businesses that use payroll companies may already be making
EFTPS payments. A business should ask its payroll company if it has already
enrolled the business in EFTPS and which taxes the company will be paying
for the business. The IRS says that it is still a good idea for a business
to enroll in EFTPS separately so there is flexibility should the business
change payroll companies.
To use EFTPS, businesses must first enroll. They can begin using
EFTPS as soon as they receive their payment instruction packet and personal
identification number. Businesses that want an enrollment form or have
questions can call EFTPS Customer Service at 1-800-945-8400 or 1-800-555-4477.
Get Ready for Year 2000
On January 1, 2000, some computer-based systems will begin processing
information as if it were January 1, 1900. This is called the Year 2000
problem or the "Y2K bug." It may cause problems for businesses unless they
This is not just a computer problem. It could affect any equipment
that uses a computer chip, as well as the suppliers and business partners
small businesses rely on. Here are three steps every business person should
First, take a self-assessment test. People should check their computers,
as well as any electronic equipment that uses time-sensitive embedded electronic
chips. The U.S. Small Business Administration�s Y2K Web site explains how
to take this test.
Second, take action now. People should fix any Y2K problems they
uncover, and test their results. They can ask their vendors for assistance.
Third, stay informed. Logging on to various Internet Y2K sites is
an excellent way to stay current, and the SBA Web site is a good place
Businesses should ask their banks, building managers, suppliers,
customers and others critical to their business if they are Y2K compliant.
For more information, contact the SBA at 1-800-U-ASK-SBA or at www.sba.gov
on the Internet.
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