The Treasury Department is upgrading its Electronic Federal Tax Payment System while phasing out some of its older systems.

The free EFTPS service allows businesses and taxpayers to pay all their federal taxes--including income, employment, estimated and excise taxes--by phone, over the Web, or through special software for tax professionals and payroll services. In May 2006 the Treasury rolled out enhanced batch provider software that allows tax professionals to send up to 1,000 enrollments and 5,000 payments with a single transmission.

As a result, two of the old software interfaces for EFTPS are going away. The Treasury won't support a legacy dial-up version of the batch provider software after Oct. 31, 2007. A PC software version won't be supported after Jan. 31, 2008. They were both over 10 years old.

The majority of tax preparers have converted at this point to the new batch software, but a few providers are still using the old systems. "To maintain our focus, it makes sense to take a step forward and only support the new batch providers," said Mark Stevens, program manager for EFTPS and director of the tax collection division at the Treasury's Financial Management Service.

He said his office had been tracking on a weekly basis the payments coming through each software channel, and was encouraged by the results he's seen so far of preparers moving over to the new system. Fewer than 400 tax preparers are still using the dial-up version of the batch provider software, although more than 13,000 have made payments using the PC software this year. Users of both versions of the software are being notified by mail about the sunset dates, and follow-up letters are going out to those who don't convert. For more information, go to www.eftps.gov.

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