EFTPS Sets New Tax Payments Record on June 15, 2011
By Melanie Rigney, Revenue Collection Group
The Electronic Federal Tax Payment System (EFTPS) is experiencing significant growth in fiscal year 2011, due in large part to the end of a paper-based system for paying business taxes.
EFTPS, part of the nation's critical infrastructure, is owned by the Financial Management Service (FMS) and operated on behalf of the Internal Revenue Service (IRS). Any federal tax can be paid using EFTPS.gov or a voice response system. In addition, there are special channels for payroll services, financial institutions, tax professionals, and other third parties who make payments on behalf of others.
On June 15, 2011, EFTPS settled a one-day record of 2,241,594 payments, surpassing the previous record of 2,235,306 set on April 15, 2009. The dollar value of the payments (which was not an EFTPS record) was $44,013,386,116.82. The previous day, June 14, 2011, set a one-day record for payments scheduled, 1,365,846, breaking the previous record of 1,304,544 set on April 14, 2009. The dollar value of the payments was $28,399,157,887.24.
June 14 also was the second-busiest day for payments scheduled through the EFTPS Web channel at 364,887, second only to March 14, 2011's 372,985 payments scheduled. On July 14, 2011, 360,728 Web payments were scheduled, the third-busiest day in EFTPS history. All top-five dates for Web payments have come in calendar year 2011.
The four busiest days for payments scheduled through the EFTPS phone channel also have occurred this calendar year: Feb. 14, 131,400 payments; March 14, 130,407; July 14, 128,714; and June 14, 127,098.
For fiscal year 2011 through July 8, EFTPS processed 99,753,193 payments, an 18.32 percent increase compared with the same period in fiscal year 2010. The payments had a dollar value of more than $1.6 trillion, a 3.26 percent increase.
About 12.4 million taxpayers are enrolled in EFTPS (an increase of more than 25 percent from a year earlier.)
"Taxpayers are embracing the security, flexibility, and convenience of EFTPS," said Russell Kuehn, FMS EFTPS program manager. "EFTPS provides online access to sixteen months of payment history, and once you've enrolled, you can schedule a payment from anywhere there's a phone or Internet connection."
Kuehn credited the gains to Treasury's all-electronic initiative, which included an end to Federal Tax Deposit (FTD) coupons as of December 31, 2010. Until that time, many businesses had the option of using EFTPS or taking coupons to a financial institution or mailing them to the IRS. IRS research had found that coupon users were 31 times more likely to make an error resulting in interest and/or penalties than those who pay electronically. The initiative resulted in cost-avoidance savings to the federal government of $65 million over five years.
"EFTPS in the fall of 2010 pre-enrolled 1.4 million coupon users to make the transition easier for them," Kuehn said. "It's a testimony to the interest in electronic payment that we've had another 1.4 million taxpayers begin using EFTPS in the past year or so."
Here is how EFTPS works: After a taxpayer enrolls at EFTPS.gov or via a paper form, and receives a personal identification number in the U.S. mail, he or she can begin scheduling payments via the voice response system. To use the Web site, the taxpayer establishes a third credential—an Internet password—real time. Payments can be scheduled up to 120 days in advance of the due date for businesses, 365 days for individuals. Payments must be scheduled by 8 p.m. ET the day before the due date to reach the IRS timely.
"EFTPS has been around since 1996 and has processed more than 1 billion payments," Kuehn said. "But this is a new era for us. We're excited about working with the IRS on ways to make the system even easier for taxpayers."