20 Nov 2013

Complying with Electronic Payments to the IRS

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Trustee Tip:

Complying with Electronic Payments to the IRS

Earlier this year, the IRS changed the way they accept payments. In order to comply, payments must be made electronically through the Electronic Federal Tax Payment System (EFTPS), a free service from the U.S. Department of the Treasury. Based on feedback from users like you, the IRS recently updated its website. They have eliminated defaults. Now you can select your own tax period and settlement dates, reducing the chance of errors.

Once enrolled, you can pay any taxes due to the IRS using EFTPS. You can make payments via this website, by a voice response system, or through special channels designed for tax professionals, payroll services, and financial institutions. Payments must be scheduled by 8 PM ET the day before the due date to be considered timely for IRS payments.

Quick, secure and accurate, EFTPS is available by phone or online 24 hours a day, 7 days a week. You can schedule a business payment up to 120 days in advance or payments for individuals up to 365 days in advance.

NOTE:  If the Trustee has not previously changed the address of the business to the Trustee’s address through the IRS, they should do so before starting the process detailed below.  To do so, use IRS Form 8822-B.

Step 1: Enroll Online

  1. The Trustee must first enroll online and acquire a PIN (personal identification number) for the Trustee and the specific estate*.  Go to https://www.eftps.gov/eftps and read the notification.  Then, click on the Enrollment button.  *The Trustee will need a separate PIN for each Case in which he needs to submit tax payments to the IRS.
  2. Read the Privacy Act and Paperwork Reduction Act and click the box to accept before continuing.IRS1
  3. Select enrollment based on a Business or Individual.
  4. Complete the Contact Information Page, making sure to use the EIN (TIN) for Estate for which you will be paying the tax.

The IRS will send you a PIN after enrollment within seven business days by mail.

Step 2: Get a Password

Once enrolled and the PIN has been received, access the IRS website at https://www.eftps.gov/eftps to get a password.

  1. Login.
  2. Click on “Need a Password.”
  3. Enter the EIN/TIN and the newly acquired PIN.
  4. Verify the banking information or your enrollment number (which appears on your PIN letter or was given to you when you activated your enrollment via phone) and select “Next.”
  5. Create your new Internet password.

Step 3: Make a Payment

  1. Go to www.eftps.gov and select “Make a Payment.”
  2. Select “Log In” again and use your EIN/TIN, PIN and newly created password.
  3. Enter the required information for the enrolled estate and follow the payment prompts to complete the e-filing process.
  4. The trustee will need the specific bank account number of the estate and the routing number of Rabobank, N.A. (122237159)
  5. The tax payments should be entered in the estate ledger as a Disbursement Adjustment.  ACH transactions will appear in CaseLink Office under Bank Communications > Received Items where they can be reviewed and posted to the Case Ledger.IRS2
  6. Trustee offices may also enter the adjustment manually, making sure to enter the processed date as it has either been communicated to the Trustee by the IRS, by the BMS Banking Center, or as it appears on the Bank statement.  **The payment will appear on the Monthly Bank Statement as an ACH debit.
  7. Payments can also be made by phone by calling the IRS VOICE RESPONSE SYSTEM: 1-800-555-3453.

If you still have questions regarding this process reach out to your local BMS Account Manager or visit the EFTPS website at www.eftps.gov for additional information.