The Treasury Department said that it has reached the milestone of processing its one-billionth electronic tax payment through its Electronic Federal Tax Payment System.
The milestone was reached on Aug. 27, but was announced Friday. The Treasury launched the EFTPS in November 1996. The system allows businesses and individuals to pay any federal tax payment electronically, 24 hours a day, 365 days a year. It is the largest tax collection system in the world, according to the Treasury, processing more than $2 trillion per year. The service is managed by the Treasurys Financial Management Service bureau and is operated on behalf of the Internal Revenue Service.
Originally built to accept tax payments over the telephone, the EFTPS was expanded in 2001 to process payments through EFTPS.gov, the Web site built for small businesses and individuals. In addition, tax professionals, payroll providers, and financial institutions can make payments through special EFTPS channels on behalf of their customers.
EFTPS has gained wide acceptance among businesses and individuals, said FMS commissioner David A. Lebryk in a statement. Nearly 10 million people are enrolled, and 98 percent of federal employment tax dollars move through the service.
So far in fiscal year 2010, EFTPS volume has increased by nearly 7.2 million payments, or nearly 8 percent, to 101.3 million items totaling nearly $1.82 trillion. In contrast, the number of paper transactions made by U.S. employers decreased by 4.5 million items, a 23 percent decline.
The taxpayer is the real winner, Lebryk said. IRS research shows that employers are 31 times less likely to make an error that results in a penalty or fee if they use EFTPS instead of paper for their payments.
Business payments through the system can be scheduled up to 120 days in advance; and individual payments up to 365 days in advance. Users receive a printable acknowledgment number as soon as each payment is scheduled. Every secure transaction at EFTPS.gov requires three pieces of authenticationan Employer Identification Number or Social Security Number; a Personal Identification Number; and an Internet password. The phone channel requires both the EIN/SSN and the PIN.
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