January 18, 2011
Re: Electronic Federal Tax Payment System
As you may already be aware, as of 1/1/11, you will no longer be able to use a paper coupon [Form 8109 (Federal Tax Deposit Coupon)] to deposit federal taxes directly to an authorized bank. Instead, you will need to make deposits by telephone or online using the Electronic Federal Tax Payment System (EFTPS). This means that after 12/31/10, all federal tax deposits (including deposits of federal employment and unemployment taxes, corporate income taxes, tax exempt organization unrelated business income taxes, private foundation excise taxes, back-up withholding, and excise taxes) must be made using EFTPS.
If you have not already done so, we are highly recommending you enroll now in the EFTPS system in preparation for any future federal taxes that your entity may need to pay.
Before you can deposit taxes using EFTPS, you must enroll either online at www.eftps.gov or by completing Form 9779 (EFTPS-Business Enrollment Form) and mailing it to the EFTPS enrollment center. We recommend enrolling online as it is more convenient and much quicker than filing Form 9779. (You can expect to receive online confirmations in 15 business days, compared to the 10 weeks which occurs often for paper applications.)
To enroll online, you will need to have the following information available:
· Employer Identification Number (EIN).
· Banking account number and routing number.
· Business name, address, and phone number as it appears on IRS
When the enrollment process is completed, you will receive two separate mailings. One will have a confirmation/update form and a step-by-step instruction booklet. The other will be a letter that includes an enrollment trace number, a personal identification number (PIN), and instructions on how to obtain an Internet password. Upon receiving the PIN, you may begin making payments by phone. To make payments online you will need to first follow the instructions and obtain an Internet password.
We know change can be difficult. Fortunately, using EFTPS has its benefits. Payments can be made 24 hours a day, 365 days a year, and they can be scheduled up to 120 days in advance of the desired payment date. EFTPS also provides a confirmation number, called an EFT Number, which guarantees that the tax deposit has been scheduled and allows the transaction to be traced if necessary. The IRS claims that errors resulting in penalties are 31 times less likely for businesses using EFTPS.
Enrolling in EFTPS is not difficult, but it does take a while for the processing to be completed (about 15 days for online enrollment and up to 10 weeks for paper enrollment). Since the new filing requirements are in place now, you’ll want to enroll as soon as possible.
If you have any questions regarding this letter, we would be pleased to assist you. Please contact us at your convenience.
Very truly yours,
SOUKUP, BUSH & ASSOCIATES, P.C.