IRS preps Web for quarterly tax payments

IRS preps Web for quarterly tax payments

When the IRS this month added a Web component to its 5-year-old Electronic Federal Tax Payment System [GCN, Sept. 10, Page 7], tax processing intermediaries cheered louder than taxpayers.

'The next adopters will be individuals who make quarterly estimated tax payments,' said James L. Fox, president of govOne Solutions LP of Denver. 'What people are really looking for is interacting with the government more efficiently.'

GovOne is a subcontractor to Bank of America Corp., which processes EFTPS payments for the IRS in the southern half of the United States.

EFTPS has collected $6 trillion in taxes from 3.5 million businesses in the last five years via PC software and an interactive voice response telephone system. Not until now has it accepted payment data over the Web.

For the time being, taxpayers must have kits with personal identification numbers and passwords before they can go to two separate sites to file and to send money from their bank accounts. IRS officials plan eventually to merge the two sites.

Meanwhile, tax intermediaries are tailoring software to calculate and remit sales tax by jurisdiction'a necessary step for taxing interstate catalog and online purchases.

Although state and local officials are eager to tap that revenue stream, they have been stymied for years by the complexity of assessing and apportioning such taxes.

Fox said his company acquired Taxware International Inc. of Salem, Mass., to provide the tax software for a one-year pilot now under way in Kansas, Michigan, North Carolina and Wisconsin.

Charles Collins, director of the North Carolina sales and use tax division, said the pilot will 'modernize sales and use tax administration.'

Catalog and online merchants will use the state-certified Streamlined Sales Tax Project software, hosted on the Web by Taxware and Hewlett-Packard Co., to remit the proper taxes electronically to various state and local taxing jurisdictions.

'National merchants want a faster, better, cheaper way to remit to the proper taxing authorities and avoid audit issues,' Fox said.

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