FROM THE OFFICE OF PUBLIC AFFAIRS

The Treasury Department and the Internal Revenue Service announced today that they are conducting a pilot program to test a new Internet-based application for businesses to pay federal taxes on-line. The new Internet version of Treasury's Electronic Federal Tax Payment System (EFTPS) will allow businesses to enroll in the system, securely make federal tax payments, and receive electronic payment history -- all through the Internet.

"EFTPS-OnLine is a more convenient and cost-efficient way for businesses to pay Federal taxes," said Treasury Secretary Lawrence H. Summers. "This program represents another important step in Treasury and IRS efforts to improve service to American taxpayers."

"With the introduction of Internet payment capabilities, we look forward to increased participation in the use of electronic tax payments," said IRS Commissioner Charles Rossotti. "Initial reaction to the concept of using the Internet has been very positive, with business owners reporting that moving EFTPS to the Internet would help them consolidate their tax business with all other business applications."

EFTPS-OnLine will make it possible for businesses to schedule future payments through the Internet and cancel payments if necessary. The Internet site will provide on-line help and how-to pages with step-by-step instructions. EFTPS-OnLine will use the strongest available security features and encryption technology to ensure taxpayer privacy and protection. After evaluating the results of the pilot program, Treasury and the IRS plan to offer the feature to all businesses in the U.S. and abroad, as well as individuals who are required to make estimated quarterly payments.

"Allowing businesses to pay their taxes online is another example of how Treasury has adopted new technologies to make the government work better," said Treasury Under Secretary for Domestic Finance Gary Gensler.

EFTPS-OnLine builds on the existing EFTPS program which already serves about 3 million businesses 24 hours a day, seven days a week. Instead of the traditional method of using paper coupons and checks, taxpayers can pay by phone, by personal computer using software, or through their financial institution. Since the inception of EFTPS in 1996, more than 180 million transactions have been processed, totaling $5 trillion.