Posted on October 1, 2010

Proposed regulations were announced by the IRS to significantly increase the number of electronic transactions between taxpayers and the federal government.

The proposed regulations would eliminate the rules for making deferral tax deposits by paper coupon. This system will no longer be maintained by the Treasury Department starting January 1, 2011. The proposed regulations maintain the existing rules for depositing federal taxes through Electronic Federal Tax Payment System (EFTPS).

Using EFTPS provides benefits to the taxpayer and federal government:

  • Deposits can be made online with a computer or by telephone
  • Payment-related errors that could result in a penalty can be reduced
  • Schedule payments to be made up to 120 days in advance

Businesses with a minimal tax liability may be able to make their payments with the related tax return.

Go to www.irs.gov for more information on how to enroll in EFTPS (Publication 4132), secure way to pay Federal taxes (Publication 966) and see the EFTPS toolkit (Publication 4320).