Vision Payroll

March 3, 2014

IRS Sends EFTPS Inquiry PINs to Taxpayers

IRS Recommends Monitoring Your Tax Payments

IRS Recommends Monitoring Your Tax Payments

In a letter dated February 20, 2014, the Internal Revenue Service (IRS) sent EFTPS Inquiry PINs to taxpayers whose tax professional enrolled them in the Electronic Federal Tax Payment System (EFTPS). EFTPS is the system through which federal tax payments are made for employment taxes and many other tax types. The letter does not mean that your tax professional has not made payments; it communicates that taxpayers should review their account regularly to ensure payments are being made.

Form 8655 Authorizes Reporting Agents to Make Deposits and Payments on Behalf of Taxpayers

Taxpayers can authorize reporting agents to perform certain functions on behalf of the taxpayers. Form 8655 can be used to authorize a reporting agent to do the following:

  • Sign and file certain returns.
  • Make deposits and payments for certain returns.
  • Receive duplicate copies of tax information, notices, and other written and/or electronic communication regarding any authority granted.
  • Provide IRS with information to aid in penalty relief determinations related to the authority granted on Form 8655.

The IRS, as stated in the letter, “recommends you monitor your EFTPS account to ensure your tax professional is making timely tax payments for you.” The PIN provided by EFTPS in the letter is called an “EFTPS Inquiry PIN” and will allow you to make inquiries on EFTPS to see if your tax professional is making the payments on your behalf as they reported to you. It does not allow you to make payments, only inquiries.

Employers Remain Responsible to Ensure Tax Payments Are Made and Returns Are Filed

Even if an employer authorizes a tax professional to make payments and file returns on its behalf, the employer remains responsible for the timely filing of employment tax returns and the timely payment of employment taxes.

Vision Payroll Recommends Monitoring Your Account Regularly

Vision Payroll recommends that taxpayers regularly review payments made through the EFTPS system using their EFTPS Inquiry PIN. By checking the payments no less frequently than monthly, and more often if needed, taxpayers can ensure that their tax payments are being made by their tax professional.

Contact Vision Payroll today.

Contact Vision Payroll if you have further questions on IRS Letter 5144, the provision of an EFTPS Inquiry PIN, a copy of which is provided below.

Text of IRS Letter 5144

Dear Taxpayer:

Your tax professional enrolled you in the Electronic Federal Tax Payment System (EFTPS) to make tax deposits or payments on your behalf. EFTPS is a free service of the U.S. Department of the Treasury.

The IRS recommends you monitor your EFTPS account to ensure your tax professional is making timely tax payments for you. To view your payment history at EFTPS.gov, you will need to create a password using the following inquiry PIN and enrollment number. At EFTPS.gov, click on “My Profile” then “Need a Password,” and enter the following information.

Your EFTPS Inquiry PIN is:

####

Your Enrollment Number is:

##################

NOTE: You cannot make a payment using this PIN.

If you already have an active inquiry PIN and password, you may continue to use those to view your payment history and not activate this new enrollment.

You’re responsible for the timely filing of employment tax returns and the timely payment of employment taxes for your employees, even if you’ve authorized a third party to do these for you. If the third party fails to make the federal tax payments, the IRS may assess penalties and interest on your account. You are liable for all taxes, penalties and interest due. The IRS can also hold you personally liable for certain unpaid federal taxes.

Please use your Inquiry PIN regularly to monitor your payment history, if the Inquiry PIN is inactive for a period of 12 consecutive months, it will be terminated. Use your TIN, PIN and Enrollment Number if you have questions about your EFTPS enrollment.

If you need assistance, call customer service 24 hours a day, 7 days a week at 1.800.991.2245. If you are calling from outside the U.S., call1.303.967.5916.

Protect your identity. Never give out your PIN or password.

October 30, 2011

IRS Releases 2011 Form 944

IRS Commissioner Douglas H. Shulman
IRS Commissioner Douglas H. Shulman
The Internal Revenue Service (IRS) has released the 2011 Form 944, Employer’s ANNUAL Federal Tax Return, and related instructions. Form 944 is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will only file once a year instead of every quarter.

Several Changes Have Been Made To the 2011 Form 944

The 2011 Form 944 has several new items. The new items include the following:

Employee Tax for Social Security Cut To 4.2%

The employee tax rate for social security has been cut to 4.2%, although the employer rate remains at 6.2%. The Medicare tax rate remains at 1.45% for both employees and employers.

COBRA Premium Assistance Credit Continues

The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. The credit is claimed on line 9a.

Social Security Wage Base for 2011

Do not withhold or pay social security tax after an employee reaches $106,800 in social security wages for the year. There is no limit on the amount of wages subject to Medicare tax.

Advance Payment of Earned Income Credit (EIC)

The option of receiving advance payroll payments of EIC expired on December 31, 2010. Individuals eligible for EIC in 2011 can still claim the credit when they file their federal income tax return.

Electronic Deposit Requirement

Beginning January 1, 2011, you must deposit all depository taxes (such as employment tax, excise tax, and corporate income tax) electronically using the Electronic Federal Tax Payment System (EFTPS). Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after December 31, 2010.

Vision Payroll Will File Form 944 for Eligible Taxpayers

Contact Vision Payroll if you have further questions on Form 944.

January 14, 2011

Question of the Week: What Are 10 Hot Items for Payroll in 2011?

What Are 10 Hot Items for Payroll in 2011?
What Are 10 Hot Items for Payroll in 2011?
This week’s question comes from Seth, a company controller. It seems as if there are many changes in payroll recently. What are 10 hot items for payroll in 2011? Answer: The payroll industry and payroll departments have seen many changes as Congress uses the payroll and payroll tax system as a means to implement desired changes in social policy. Many items are new or revamped for 2011.

10 Hot Payroll Items in 2011

  1. 2011 Withholding Table Changes: Because of the recently passed Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Act), employers should implement the 2011 withholding tables as soon as possible, but not later than January 31, 2011.
  2. Reduced Social Security Tax Rate for Employees: For 2011, the employee tax rate for Social Security is 4.2%, down from 6.2% in 2010. The employer rate remains at 6.2%.
  3. Expiration of Making Work Pay Credit: The Making Work Pay credit expired on December 31, 2010, resulting in higher federal withholding from many employees in 2011.
  4. Extension of COBRA Premium Assistance Credit: The credit for COBRA premium assistance payments has been extended to include premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months.
  5. Advance Payment of Earned Income Credit (EIC) Discontinued: The option to receive advance payroll payments of EIC expired on December 31, 2010.
  6. Federal Tax Payments Must Be Made by Electronic Funds Transfer: With the discontinuation of Forms 8109 and 8109-B, most federal tax payments must now be made by electronic funds transfer.
  7. FUTA Tax Rate Scheduled to Decrease: Under current law, the FUTA tax rate will decrease from 6.2% to 6.0%, effective July 1, 2011.
  8. Withholding Allowance Amount Set at $3,700: For 2011, the amount for one withholding allowance on an annual basis is $3,700, up from $3,650 for 2009 and 2010.
  9. Aggregate Form 940 and Form 941 Filers Must File Schedule R: Agents must complete the appropriate Schedule R when filling an aggregate Form 940 or Form 941.
  10. Choose to File Form 941 Instead of Form 944: Employers notified that they should file Form 944, but who want to file Form 941 instead, may notify the IRS and request to file Form 941.

More Changes Expected Throughout 2011

Check VisionPayroll.com regularly as the only certain thing about payroll and payroll taxes for 2011 is that many more changes can be expected.

December 18, 2010

IRS Releases 2010 Form 940

On 2010 Form 940, Michigan Is One of Three Credit Reduction States
On 2010 Form 940, Michigan Is One of Three Credit Reduction States
The Internal Revenue Service (IRS) has released the 2010 Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, and accompanying instructions. Employers use Form 940 to report their annual Federal Unemployment Tax Act (FUTA) tax.

FUTA Tax Must Be Deposited Electronically Using EFTPS in 2011

As previously announced, the IRS will discontinue accepting paper coupons for depository taxes after December 31, 2010. Employers should make their deposits electronically using Electronic Federal Tax Payment System (EFTPS).

Three Credit Reduction States for 2010

There are three credit reduction states for 2010: Michigan, Indiana, and South Carolina. The effective FUTA rate for most Michigan employers is 1.4% and for most Indiana and South Carolina employers it’s 1.1%. Most other employers have an effective rate of 0.8%.

2011 FUTA Rate Scheduled to Decrease

Under current law, the FUTA tax rate is scheduled to decrease to 6.0% (before SUTA credits) on July 1, 2011. The rate for the first six months of 2011 is 6.2%.

Vision Payroll to File Form 940 Electronically

Vision Payroll will file Form 940 for its clients electronically with the IRS and will not submit the paper version. Employers will be able to download a copy of Form 940 for their records.

December 10, 2010

Question of the Week: Why Did I Receive a Notice About Federal Tax Deposit Coupons?

Filed under: News — Tags: , , , , — Vision @ 11:47 am
Why Did I Receive a Notice About Federal Tax Deposit Coupons?
Why Did I Receive a Notice About Federal Tax Deposit Coupons?
This week’s question comes from Carl, a corporate controller. I received a notice from the Internal Revenue Service (IRS) about Federal Tax Deposit coupons titled, You can no longer make required deposits using Form 8109/8109-B. Why did I receive a notice about Federal Tax Deposit coupons? Answer: As previously announced, the IRS will discontinue accepting paper coupons for Federal Tax Deposits after December 31, 2010.

Updated Guidance Issued by the IRS

Updated guidance was announced in TD 9507 (REG153340-09), published in the Federal Register on December 7, 2010. The Explanation of Provision and Summary of Comments was broken into several sub-topics.

  1. Burden on Small Businesses
  2. Alternative Payment Methods
  3. Raising the De Minimis Amounts
  4. Security and Distrust of Electronic Payment Systems
  5. EFTPS Registration
  6. Foreign Taxpayers
  7. One-Day Rule
  8. Delay the January 1, 2011 Effective Date
  9. Business Days and Legal Holidays
  10. Other Differences From the Proposed Regulations

Taxpayers Must Make Most Payments Electronically

Most taxpayers must make all payments electronically. Small employers (those whose tax liability on the return is less than $2,500) have three options to make payments:

  • Remit employment taxes with their quarterly or annual tax return,
  • Voluntarily make deposits by EFT, or
  • Use other methods of payment as provided by the instructions relating to the return.

Vision Payroll Makes Federal Tax Payments Using EFTPS

Vision Payroll makes all federal payroll tax deposits and payments using EFTPS. Additional payments for taxes such as federal income taxes and federal excise taxes may be made for clients by Vision Payroll. Previous registration is required so contact Vision Payroll today to get started.

December 1, 2010

Tip of the Week: IRS Releases 2010 Form 944

IRS Commissioner Douglas H. Shulman
IRS Commissioner Douglas H. Shulman
The Internal Revenue Service (IRS) has released the 2010 Form 944, Employer’s ANNUAL Federal Tax Return, and related instructions. Form 944 is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will only file once a year instead of every quarter.

Several Changes Have Been Made To the 2010 Form 944

The 2010 Form 944 has several new items. The new items include the following:

Qualified Employer’s Social Security Tax Exemption

Qualified employers are allowed an exemption for their share (6.2%) of social security tax on wages/tips paid to qualified employees after March 31, 2010, and before January 1, 2011.

Qualified Employer’s Social Security Tax Credit

Qualified employers are allowed a credit for their share (6.2%) of social security tax on wages/tips paid to qualified employees after March 18, 2010, and before April 1, 2010.

COBRA Premium Assistance Credit Extended

The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months.

Social Security Wage Base for 2010 and 2011

Do not withhold or pay social security tax after an employee reaches $106,800 in social security wages for the year. There is no limit on the amount of wages subject to Medicare tax.

Advance Payment of Earned Income Credit (EIC)

The option of receiving advance payroll payments of EIC expires on December 31, 2010. Individuals eligible for EIC in 2011 can still claim the credit when they file their federal income tax return. Individuals who receive advance payments of EIC in 2010 must file a 2010 federal income tax return.

Electronic Deposit Requirement

The IRS has issued proposed regulations under §6302 of the Internal Revenue Code of 1986 which provide that beginning January 1, 2011, you must deposit all depository taxes (such as employment tax, excise tax, and corporate income tax) electronically using the Electronic Federal Tax Payment System (EFTPS). Under these proposed regulations, which are expected to be finalized by December 31, 2010, Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after December 31, 2010.

Vision Payroll Will File Form 944 for Eligible Taxpayers

Contact Vision Payroll if you have further questions on Form 944.

August 27, 2010

Question of the Week: Is There a Problem with My EFTPS Payment?

Filed under: News — Tags: , , , , , — Vision @ 12:36 pm
Question of the Week
Question of the Week
This week’s question comes from Ben, a business owner. We received an e-mail from EFTPS stating that my federal tax payment had been rejected. Is there a problem with my EFTPS payment? Answer: On August 20, 2010, the Internal Revenue Service (IRS) issued a Problem Alert regarding this EFTPS scam.

Text of IRS Problem Alert

There is a fraud risk you need to be aware of. It is related to the Electronic Federal Tax Payment System (EFTPS).

The IRS recently became aware of a fraudulent scheme targeting EFTPS users, the scheme uses an e-mail that claims your tax payment was rejected and directs you to a website for additional information. The website contains malware that will attempt to infect your computer.

If you receive a message claiming to be from the IRS or EFTPS, please:

  1. Do not reply to the sender, access links on the site or submit any information to them.
  2. Forward the message immediately to us at phishing@irs.gov.
  3. How to report and identify phishing, e-mail scams and bogus IRS websites.
  4. If you receive a suspicious e-mail or discover a website posing as the IRS, please forward the e-mail or URL information to the IRS at phishing@irs.gov.
  5. EFTPS is a tax payment system provided free by the US Department of Treasury. Pay federal taxes electronically via the Internet or phone 24/7. Visit EFTPS to enroll.

IRS and EFTPS Do NOT Send Unsolicited E-mails or Request Personal Information

Neither the IRS nor EFTPS sends unsolicited e-mails nor do they request personal or financial information in e-mails.

Stay Vigilant Against Attacks Aimed at Stealing Your Personal Information

Although no system is foolproof in preventing identity theft, Vision Payroll recommends vigilance in dealing with personal information, combined with a service such as LifeLock® to help detect certain types of identity theft.

August 21, 2010

IRS Issues Proposed Regulations to Discontinue Paper Coupons

Filed under: News — Tags: , , , — Vision @ 11:09 am
EFTPS Will Soon Be Required for Most Payroll Tax Payments
EFTPS Logo
In IR-2010-092, the Internal Revenue Service (IRS) recently announced proposed regulations (REG 153340-09) that eliminate the ability for taxpayers to deposit taxes using paper coupons. Additionally, businesses with a quarterly Federal tax liability of more than $2,500 would be required to pay taxes electronically.

Paper Coupons Eliminated Starting in 2011

Since the Treasury Department will no longer maintain the paper coupon system after December 31, 2010, the proposed regulations eliminate rules related to that system. Taxpayers who have a tax liability of less than $2,500 in a quarter would be able to pay the amount with the return. All other taxpayers will be required to pay electronically.

Contact Vision Payroll Now!

As an authorized batch filer using the EFTPS system, Vision Payroll can transmit electronic tax payments in batches for multiple taxpayers. This is the most efficient method to transmit payments to the IRS. Electronic payments have a significantly lower error rate than paper coupons and therefore reduce correspondence from the IRS that attempts to resolve those errors.

Contact Vision Payroll today to get started.

July 3, 2008

Court Upholds Penalties on Joe Pesci’s Company for Timely Paid Payroll Taxes

Filed under: News — Tags: , , , — Vision @ 2:07 pm

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.”

Contact Us Vision Payroll
Client Remote Access