The Treasury Department is stepping up its campaign to persuade tax preparers and businesses, especially small ones, to send tax payments through its electronic system instead of paper tax coupons.
The effort could reduce a burden on banks, which must process the payments but cannot charge the customer or the government for the service.
The department has developed an array of tools — from staff training materials to brochures and statement stuffers — to help banks promote the system to tax preparers and small businesses, which are the primary users of federal tax coupons.
Gary Grippo, the assistant commissioner of the Treasury’s Financial Management Service, said Monday that it is signing up “partner organizations” to help publicize the “Simplify” campaign and expects to announce its first group of bank partners soon. However, he also said no banks have signed on yet, even though the campaign began in November.
Eventually, the Treasury plans to let banks to link their online payment services to the government’s Electronic Federal Tax Payment System, he said.
“We hope to have a number of large banks and credit unions to participate with us,” Mr. Grippo said.
Nearly two-thirds of federal tax payments — 78 million of them last year, including those for corporate, excise, employment, and individual quarterly estimated taxes — already flow through the system, but 42 million others, many of them processed by banks, still use Federal Tax Deposit coupons.
The Treasury hopes to eliminate 4.2 million of those payments in the campaign’s first year, Mr. Grippo said.
“We can save the banks money. We can eliminate an exception process. We can reduce their overhead,” he said. “It doesn’t take any business away from the financial institution or affect the customer relationship.”
The Treasury has set up a Web site for financial institutions (www.simplifyfsi.info) that includes some sample brochures and a guide that tellers could use to talk to customers. The site says it will also eventually offer samples of statement stuffers and some other promised materials.
Though the Treasury has not yet received commitments from banks, “we’re certain a number of the large ones will participate,” Mr. Grippo said.
A number of trade groups, including the American Institute of Certified Public Accountants and Nacha, the electronic payments association, have signed up to support the system, he said.
Michael Herd, a Nacha spokesman, said the Herndon, Va., group will promote the system to its members. “It’s in line with our goal of making tax payments and tax refunds all electronic,” since the electronic payments run through the automated clearing house systems for which Nacha sets the rules.
“It’s useful for the banks, too,” Mr. Herd said. “Particularly for the small businesses that are walking these coupons in to the bank, there is an opportunity for process improvement.”
Cary Whaley, the associate director of payments policy for the Independent Community Bankers of America, said the Washington trade group plans to offer member banks online seminars on the campaign.
“Having that payment handled electronically is great from our perspective,” Mr. Whaley said. Most bankers would be relieved not to have to deal with tax coupons. “This is an additional responsibility that isn’t a revenue generator. It’s an obligation.”
ICBA’s goal is “to improve the quality of a bank visit for the small business customers,” Mr. Whaley said. By making tax payments online rather than at a branch, “when they come, they will come for a reason that is account generating.”
Norma Alexander Hart, the president of the National Bankers Association, said it made its first presentation on the program last week at a member conference in Washington.
“I think it’s a great program,” Ms. Hart said. “Everybody makes their own decisions.”
The electronic system, which the Treasury launched in 1996, operates a transactional Web site (www.eftps.gov) and offers direct-connect interfaces for large corporate taxpayers, such as payroll processors, as well as batch-processing software for tax preparers. It also offers an automated voice-response system for telephone payments.
Mr. Grippo said the Treasury is testing an “open specification” that would enable software companies and accounting firms to write their own code for connecting with the system.
The specification should be available in the next couple of months, he said. “Then we can devote resources to [helping] individual banks to connect to EFTPS.”
