ISSUE

Between institutions endeavoring to venture into “Enterprise Opportunities” that generate unrelated business income and the dreaded “Parking Tax,” the IRS’ Electronic Federal Tax Payment System (EFTPS) has become a reality to be dealt with.

 

SITUATION

Marathon Bible College (MBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii).  They are required to file Form 990 annually.

MBC has been in the process of establishing a “print shop” business that serves not only their campus, but the community at large.  As the activity ramps up in their new fiscal year, they are wondering about how they might make estimated tax payments to the IRS.

We tell them that they need to make electronic payments through the IRS’ EFTPS system.

“We have an external payroll service that handles our payroll taxes, so we’ve not historically been registered for the electronic deposit system.  How do we do that?”

“Well,” we say, “you need to enroll with EFTPS by going to www.eftps.gov and selecting “Enrollment.”  Or, you can call 800-555-4477.  Also, you may already be ‘pre-enrolled’ and have a PIN assigned.  Otherwise, it will take 5-7 business days to get your PIN in the mail.   There are instructions provided as you go through the enrollment process.”

“But we really don’t know anything about the system after we are enrolled.”

“That’s okay, we can help.  But, probably the best place to start is IRS Publication 4990, EFTPS Payment Instruction Booklet For Business & Individual Taxpayers.”

IRS Publication 4990 gives “quick reference” information on things like Making a Payment, Cancelling a Payment, Changing Financial Institution Information, IRS Tax Form Numbers & Codes, Payment Worksheets, and Important EFTPS Telephone Numbers.

 

RULES

From EFTPS.gov:

The Electronic Federal Tax Payment System® tax payment service is provided free by the U.S. Department of the Treasury. After you’ve enrolled and received your credentials, you can pay any tax due to the Internal Revenue Service (IRS) using this system.

From EFTPS.gov (after “Enroll” is selected):

Stop! If you used a coupon in the past two years or if your business is less than a year old, you are pre-enrolled in EFTPS. Please locate the four-digit Personal Identification Number (PIN) that was mailed to you and call 800.555.3453 to activate your enrollment. You’ll need your banking information to do so. If you can’t find your PIN and have not already completed your enrollment, call 888.434.7338 and your PIN will be given to you.  If you choose instead to create a new enrollment in EFTPS by completing the form on this page, it will be five to seven business days before you receive your PIN in the mail and can schedule a payment.

From IRS Publication 4990:

This is your quick reference guide for using the Electronic Federal Tax Payment System (EFTPS).

Note:  All federal taxes for both businesses and individuals can be paid using EFTPS.

Payments must be scheduled by 8 p.m. ET the day before the due date to be timely.

For additional information, please see the FAQ section of EFTPS.gov.

If you have downloaded this booklet but have not yet enrolled, simply visit EFTPS.gov and select “Enrollment” to get started.

 

BOTTOM LINE

  • Many institutions already utilize EFTPS for services such as payroll tax deposits.
  • Enrollment in the system is not as “instant” nor simplified as we might prefer, but your institution may already be enrolled.
  • IRS Publication 4990 is a good “quick reference guide” for the EFTPS system.
  • The motto for dealing with EFTPS should be “THINK AHEAD!”

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.

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