Printer Friendly

Many companies must file tax returns electronically by 1997.

Taxpayers paying more than $50,000 in employment taxes must make their 1997 federal tax deposits electronically. In May, the Internal Revenue Service began notifying companies that paid employment depository taxes of more than $50,000 in 1995 that they must enroll in the electronic federal tax payment system (EFTPS) by November 1, 1996. Companies that do not enroll or do not make electronic payments will be assessed tax-avoidance, noncompliance and failure-to-pay penalties. For example, a company that deposits taxes using a check and form 8109 will be penalized 10% of its taxes.

The North American Free Trade Agreement of 1993 authorized the secretary of the treasury to mandate the electronic payment method for business taxes. The IRS supports the electronic funds transfer system because it makes payments more timely and efficient. A business that uses a third-party payroll processor or a financial institution as a reporting agent must still enroll in the EFTPS. All other taxpayers can voluntarily enroll and pay electronically.

For more information, contact the EFTPS customer service center at (800) 945-8400 or (800) 55%4477.

Electronic Payment

Companies with more than $50,000 in employment taxes must use an electronic payment system when filing the following forms:

Form 940, form 94l, form 943,

form 720, form 945, Form 990-C,

form 990-PF, form 990-T, form 1042,

form 1120, form CT-1
COPYRIGHT 1996 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Jul 1, 1996
Previous Article:Taxpayers want tax reform but do not favor flat tax.
Next Article:IRS to conform certain rules for 401(k) and 403(b) plans.

Related Articles
IRS reverses controversial procedural notice.
An update on electronic tax deposits.
Commissioner calls on more CPAs to file electronically.
Charge it!
IRS modernization and E-filing strategies.
Electronic extensions to file individual income tax returns.
The ETA needs you.
Mandatory electronic filing of partnership returns delayed.
Unsigned joint return was not valid; 10th Cir. reverses own decision and affirms Tax Court.
How to have a successful e-filing experience. (Tax Practice Management).

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters