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CCH® PAYROLL — 08/31/10

IRS proposed regs would eliminate paper coupon tax deposits

The IRS has released proposed regulations under Code Sec. 6302 to significantly increase the number of electronic transactions between taxpayers and the federal government. If adopted as final, the proposed regulation would remove the rules for making federal tax deposits by paper coupon because the paper coupon system will no longer be maintained by the Treasury Department after December 31, 2010. However, the proposed regulations generally maintain existing rules for depositing federal taxes through the Electronic Federal Tax Payment System (EFTPS).

Using EFTPS to make federal tax deposits provides substantial benefits to both taxpayers and the government. EFTPS users can make tax payments 24 hours a day, seven days a week from home or the office. Deposits can be made online with a computer or by telephone. EFTPS also significantly reduces payment-related errors that could result in a penalty. The system helps taxpayers schedule dates to make payments even when they are out of town or on vacation when a payment is due. EFTPS business users can schedule payments up to 120 days in advance of the desired payment date. Information on EFTPS, including how to enroll, can be found at http://www.eftps.gov or by calling EFTPS Customer Service at 1-800-555-4477. Under the new rules, some businesses paying a minimal amount of tax may make their payments with the related tax return, instead of using EFTPS.

These proposed regulations are expected to be finalized by the end of 2010. The final regulations are expected to apply to remittances made after the date that final regulations are published in the Federal Register, but in no event earlier than January 1, 2011. Before the proposed regulations are adopted as final, the IRS will consider any written (a signed original and eight copies) or electronic comments that are submitted by September 27, 2010. (IRS News Release IR-2010-92 , August 19, 2010; 75 FR 51,707, August 23, 2010, as corrected by 75 FR 52,485, August 26, 2010.)

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