The US District Court for the Southern District of New York has upheld payroll tax penalties on a company owned by actor Joe Pesci even though the taxes were timely paid. The IRS assessed the penalties because the company did not pay the taxes electronically as required by law. In Fallu Productions, Inc. v. United States et al., No. 1:06-cv-13248 (USDC SD NY), the court ruled that the “increased efficiency of the EFTPS [Electronic Federal Tax Payment System] provides reasonable justification for requiring…the system.” Furthermore, “the imposition of FTD [federal tax deposit] penalties when taxes are not deposited electronically as required does not violate taxpayers’ due process rights.”