Tax Coupons To Vanish?

When a corporation wants to make a payment on its taxes, it writes a check and gives it to their financial institution along with the coupon that has been supplied by the Internal Revenue Service. The bank, in turn, processes the coupons and checks, and then sends payment reports to the IRS, and to the Federal Reserve.

There are approximately 80 million of these transactions per year handled by 14,000 financial institutions, with a dollar figure of over $800 billion. The financial institutions are not paid by the IRS for processing any of these federal tax deposits.

The IRS, in an effort to automate tax payments and reduce the amount of paper they must handle is working on an $8 billion plan that by the year 2000 should change the coupon/check/report process to an integrated electronic system.

The system is called ADEPT (Automated Deposit of Electronic Payment of Taxes). So far the six testing banks, working with 22 corporations, have sent about $24.7 million in withholding tax payments as credits over the automated clearing house system.

If the details can be worked out in the near future between the financial institutions and the IRS (particularly the one concerning float) those annoying tax coupons and payments may be a thing of the past for the tellers.

Copyright © 1991 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 2, No. 6, 7/91