DEFINITION of 'Electronic Federal Tax Payment System - EFTPS'
The Electronic Federal Tax Payment System (EFTPS) is a service, provided by the U.S. Department of the Treasury, that allows taxpayers to make tax payments either by telephone or online. This system is accessible every day of the week, 24 hours a day. It can be utilized by corporations or individuals seeking to make payments on personal income taxes. The primary function of this service is convenience, allowing taxpayers to easily make payments around personal schedules and avoid having to make such payments in person or through the mail.
BREAKING DOWN 'Electronic Federal Tax Payment System - EFTPS'
As of April 2016, EFTPS can be accessed by calling 1-800-555-4477 or by logging on to EFTPS.gov. Using an electronic password, taxpayers can access their personal and business accounts. If EFTPS is not working correctly or is unavailable for any reason, taxpayers are not excused from making timely payments in person or through the mail.
Using EFTPS must be planned for in advance. While the system makes secure tax payments simple, it requires users to take a few steps. Payments can only be made after enrollment, a process that can take up to a week as initial online enrollment is followed by physical mail and includes verification of the bank account from which payments will be debited. Utilizing EFTPS to make estimated tax payments is highly recommended as payments can be scheduled in advance but also be modified later if unexpected changes occur, such as a shortage of funds.
Security and Privacy
The EFTPS website uses a secure server, complete with internal security policies and firewalls, to prevent unwanted and unintended parties from gaining access to users’ financial information. The website also indicates that government agencies, including the Internal Revenue Service (IRS) have no access to enrollees’ accounts. Only explicitly scheduled payments, or those authorized by the enrollee, can be processed by the site. Furthermore, the EFTPS website requires enrollees to input the personal identification number they receive as part of the enrollment process, as well as their taxpayer identification number and password to access the site and perform any function that connects them to sensitive financial information.
The most significant risk when using EFTPS is the potential for phishing scams that occur outside of the EFTPS website. In the past, fraudulent emails were sent that targeted EFTPS users, indicating that identification numbers were rejected or prompting users to follow an embedded link to change personal information. Such a link, instead, installed malware on users’ computers and was used to intercept banking information. All users are advised to contact EFTPS if any suspicious emails are received.