WASHINGTON — People and companies can now pay all federal taxes on a secure Internet site that promises greater convenience and reduced paperwork.
The initiative, to be announced today but already operational, opens to all U.S. taxpayers a Web site that is part of the Electronic Federal Tax Payment System, or EFTPS. The Web site, used primarily by businesses in a pilot program, has collected more than $1.9 billion in taxes over the past year.
"Technology can do many wonderful things," said Deputy Treasury Secretary Ken Dam. "Unfortunately, it can’t make taxes disappear, but EFTPS-Online can make taxes less painful to pay."
Any federal tax can be paid using the system, which is free. Internal Revenue Service officials say it should be particularly attractive to individuals who make quarterly estimated payments. In fiscal 2000, about 39.2 million estimated tax payments were made.
Taxpayers must enroll in the system by going to the Internet site and following the prompts. Necessary information includes a taxpayer identification number — for individuals, that’s a Social Security number — as well as precise spelling of the taxpayer’s name and bank information.
After enrollment, the taxpayer will receive by mail a confirmation kit that includes a password for the Internet site. A separate mailing will include a unique personal identification number for additional security.
Among the promised benefits for taxpayers:
IRS officials say the system will reduce paperwork, improve cash flow for the government and improve the agency’s accuracy and responsiveness to taxpayers.
About 3.5 million individuals and businesses have enrolled in the overall EFTPS program, which allows payments by telephone, over the Web site and through a dial-up program using computer software. More than $5.7 trillion in taxes has been collected since the program began in 1996.
Terry Lutes, director of IRS electronic tax administration, said the online system is more secure that those used by banks and includes dedicated hardware, several layers that are difficult to breach and 24-hour, seven-day-a-week monitoring by the IRS.
"If somebody were to try to gain unauthorized access, they would have significantly more difficulty than they would with a system in the private sector," Lutes said.
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