Accounting Articles > Federal Payroll Tax:
941 Short Form EFTPS (Electronic Filing Taxpayers System)
EFTPS is The Electronic Filing Taxpayers System. I am not a fan of this system. When there are problems, how do you fix them?
This is The Internal Revenue Service that we are talking about. There are always problems:
- How do you prove that a return was filed timely?
- How do you prove that it was filed at all?
- Do you have a canceled check that cleared your bank on a specific date to prove that something was paid?
- What happens when you send an electronic payment that isn’t processed in the first place?
- You don’t have an electronic payment coming out of your checking account to prove that something was paid.
- How do you stop the interest and penalties?
You don’t.
Will the system ever work the way that it is supposed to? Probably not. The EFTPS handles millions of dollars every day from hundred of thousands of employers and taxpayers. Just given the vast numbers being handled by the system, there are going to be problems. What happens when you are one of those problems? Do you think that your local IRS agent is going to wake up on the right side of the bed and be nice?
I realize that given the size of many payrolls, you don’t have a choice. I am saying that this system should be avoided whenever humanly possible. It’s much better to have the documents in hand so that you can prove you’re innocence.
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