IRS eliminating paper tax deposits
The IRS has issued proposed regulations that would discontinue the use of paper federal deposit coupons (IRS Form 8109), beginning on December 31, 2010. The existing rules for depositing federal taxes through the Electronic Federal Tax Payment System (EFTPS) would remain valid, which would effectively increase the volume of transactions initiated by taxpayers on an electronic basis. It is important to note that for those who engage a payroll service company or a CPA to handle their federal tax deposit responsibilities, no action is likely needed on their part.
The proposed changes will apply to corporate income and estimated taxes, FICA taxes and withheld income taxes, Federal Unemployment Tax Act (FUTA) taxes, and businesses with any quarterly federal tax liability in excess of $2,500 must remit payment electronically, rather than mailing a check with the tax return.
Organizations making the types of tax payments noted above, if not currently enrolled in EFTPS, may want to act promptly in order to transfer their current paper coupon payment function to the EFTPS payment system well in advance of December 31, 2010—the end of the federal deposit paper coupon system.