Business Federal Tax Rules

The Tax Attic — by Jerry Coon — August 26, 2010

August 26, 2010 // 0 Comments

Business federal tax rules revised  The Internal Revenue Service is keeping busy this summer. In a previous article, I discussed various court cases that involved the IRS and taxpayers. Auditing taxpayers is one way the IRS keeps busy. Those audits from time to time develop into court cases. Another manner of staying busy is by revising the various rules under which businesses operate. They recently issued Proposed Regulation Number 153340-09 that revises, effective January 1, 2011, how businesses deposit and pay federal taxes. Currently, businesses have four choices to pay federal taxes. First, they can take a paper coupon, a Form 8109, and a check to a federal bank. The bank processes the check and scans in the coupon. The money and the coupon are then forwarded to the IRS. Unfortunately, errors occur in this system. Taxpayers complete the Form 8109 by hand, writing in the amount of the check and filling in a box that indicates the type of tax being paid. Anytime anyone handwrites anything, there are opportunities for error. Most people are dyslexic to some extent, and it’s very easy to write a check for $1,019.25 and enter $1,109.25 in the Form 8109 amount box. It’s also very easy to fill in the wrong box indicating the type of tax to be paid. Making either one of these errors causes all types of problems at a later time when the IRS tries to match the tax paid with the amount paid and type of tax paid on the coupon. It can and is a real mess. Second, the business can mail the Form 8109 and a check directly to a federal reserve bank. That brings a whole new set of problems into play. It’s called the United States Post Office. In this area, we mail our checks and coupons to the Federal Reserve bank located in St. Louis, Mo. If a tax payment is due on the 15th of the month, how many days before the 15th must the check and coupon be mailed for it to make it to St. Louis by the 15th? It should be three or four days, but it could be eight or nine days. It’s better to be safe than sorry. I know the Post Office […]