As of December 31, 2010, the Treasury Department no longer maintains the paper coupon system for making federal tax deposits. As a result, effective January 1, 2011, the Internal Revenue Service issued regulations requiring almost all federal tax payments to be made using the Electronic Federal Tax Payment System (EFTPS), which allows taxpayers to pay federal taxes electronically via the internet or by phone.
Payments that must be made electronically include Form 990-T unrelated business income tax, Form 1120-POL income tax, and related estimated tax payments. You must be enrolled in EFTPS in order to use it. Keep in mind that if you use a payroll service and the service is making your tax deposits, these deposits are made using the payroll service's EFTPS enrollment. Consequently, if you are required to make other tax deposits you will have to enroll in EFTPS. You can enroll at www.eftps.gov.
The rules for making electronic payments have otherwise remain unchanged. Failure to use EFTPS, if required, may result in a 10% penalty.
By Maria C. Solis, CPA, Partner, msolis@legacycpas.com