If you are a business owner and you pay your federal tax payments with a Federal Tax Deposit Coupon, also known as a TT&L Coupon or IRS Form 8109, you will no longer have this option for payment after December 31, 2010. Starting next year, all businesses will be required to pay taxes electronically. Most larger businesses have converted in past years, but there are still a large number of businesses using coupons. The IRS is currently in the process of sending out Letters of Intent and Pre-enrollment letters.
The IRS expects that all effected taxpayers should receive their packets by November 10th. This program is called EFTPS – Electronic Federal Tax Payment System and it is offered free of charge. This gives you the option of paying over the phone through touchtone or over the internet. You may enroll online at www.eftps.gov. More information is available 24/7 through EFTPS Customer Service 1-800-555-4477.
If you have trouble with giving the IRS access to your account by providing them with your account number and bank information, you have another option. Instead of letting the government “pull” the money out of your account, you can actually “push” the money to them, without giving them any of your banking account information. This is as easy as contacting your bank and asking them to set you up to send the payments (ACH credit) yourself. You will still need to enroll in the EFTPS program, and you will more than likely pay a fee to your bank for this service. It surprises me how many people opt for this solution as people do not want to voluntarily provide their account information to the government. Many will go to great lengths to keep the IRS away from their accounts.
One last solution is available – sending a wire transfer on the due date. I would not recommend this as the cost is prohibitive and you have too many other options.
And if you didn’t have enough to worry about, be aware of a Phishing Alert. Emails claiming to be from EFTPS are on the rise. The “from” field in these emails is spoofed to appear as if it is originating from “EFTPS Tax Payment,” and the email tells users that their tax payment submitted through the EFTPS has failed. The message provides a link to obtain additional information. There is malware installed and clicking on the link allows fraudsters to steal online banking credentials, credit card details, and other sensitive information. Be smart: DO NOT CLICK ON THE LINK!