IRS Issues Proposed Regulations That Would Require Electronic Deposits for Almost All Business Payments

by

Via the Journal of Accountancy

The IRS has issued proposed regulations that would require taxpayers to use the IRS’ Electronic Federal Tax Payment System (EFTPS) to make federal ax deposits of various withheld and estimated taxes.  The change would eliminate the paper coupon payment system at the end of this year.

The proposed regulations will require the following types of taxes to be deposited electronically:

1. Corporate income and corporate estimated taxes pursuant to § 1.6302-1
2. Unrelated business income taxes of tax-exempt organizations under section 511 pursuant to § 1.6302-1
3. Private foundation excise taxes under section 4940 pursuant to § 1.6302-1
4. Taxes withheld on nonresident aliens and foreign corporations pursuant to § 1.6302-2
5. Estimated taxes on certain trusts pursuant to § 1.6302-3
6. FICA taxes and withheld income taxes pursuant to § 31.6302-1
7. Railroad retirement taxes pursuant to § 31.6302-2
8. Nonpayroll taxes, including backup withholding pursuant to § 31.6302-4
9. Federal Unemployment Tax Act (FUTA) taxes pursuant to § 31.6302(c)-3
10. Excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, pursuant to § 40.6302(c)-1

A public hearing is set to be held on the proposed regulations on September 21, 2010 in the IRS Building in Washington D.C. 

Further information about this proposed change can be found at these sites:

IRS

Accountingweb.com

We will closely monitor these proposed changes and report any related news.

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