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CCH® PAYROLL — 7/7/08

ETAAC issues annual report to Congress

The Electronic Tax Administration Advisory Committee (ETAAC) has issued its annual report to Congress together with some payroll-related recommendations, reproduced below.

Form 941

ETAAC recommends that the IRS develop a free online filing solution for employers to input and e-file their Employer’s Quarterly Federal Tax Return, Form 941. ETAAC has identified three possible approaches: IRS develops, implements, and maintains a 941 e-file solution; IRS contracts out the development of a 941 e-file solution; or IRS negotiates a similar solution to the Free File Alliance program with third party vendors.

ETAAC recommends that employers who are required to e-file their W-2s electronically also be mandated to e-file their Forms 941. This recommendation was made by the ETAAC in 2007.

Reporting agents and EFTPS

ETAAC recommends that Reporting Agents, who file employment and unemployment returns for others, be required to submit payments electronically via EFTPS.

Information returns

ETAAC recommends that the mandate threshold for filing W-2s electronically be decreased. The appropriate level should be based upon input from SSA on the affect of mandates on their W-2 website utilization and the threshold level needed to eliminate the majority of the 45 million paper W-2 filings. It is ETAAC's understanding that Congress must authorize the change in this mandate. This recommendation was made by the ETAAC in 2007.

ETAAC recommends that the IRS develop an online process to upload data electronically for inputting and e-filing Forms 1099-MISC, similar to the functionality provided by the SSA that allows W-2s to be electronically submitted. This recommendation was made by the ETAAC in 2007. (IRS News Release IR-2008-83, June 27, 2008; IRS Pub. 3415 (Rev. 6-2008); ETAAC Annual Report to Congress, June 19, 2008.)

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