ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, August 20, 1996 TAG: 9608200023
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
USE OF THE SYSTEM will be required beginning Jan. 1 for employers who meet the threshold amount of $50,000.
Businesses that had employment tax deposits in excess of $50,000 in 1995 must begin next year using a new Internal Revenue Service electronic system for depositing all federal taxes.
The IRS electronic federal tax payment system allows employers to transfer tax deposits electronically, without leaving their offices, according to IRS officials.
Use of the system is required beginning Jan. 1 for employers who meet the threshold amount of $50,000.
Failure to make payments electronically will result in a penalty of 10 percent of the tax payment.
But Margaret Milner Richardson, commissioner of internal revenue, said the IRS will not impose the penalty until July 1, 1997. She said this will give businesses six more months to continue making federal tax deposits with traditional paper coupons while they set up procedures to use the electronic system.
The system changes only the method of making deposits. Business taxpayers must still file federal tax returns on the required date for each tax period.
Richardson said businesses should enroll by Nov.1 so they can meet the Jan.1 deadline. It will take two to 10 weeks to complete the enrollment process.
The system next year will affect 1.3 million businesses, including about 33,000 in Virginia and West Virginia.
Businesses that make tax payments of $50,000 in 1996 will be required to begin using the electronic system by Jan. 1, 1998.
Those who will make tax payments of only $20,000 during 1997 must begin making payments electronically on Jan. 1, 1999.
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