Rp 1998-32

04. Maximum Automobile Value for
Using the Cents-per-mile Valuation Rule.
(1) Amount of Adjustment. Under
§ 1.61–21(e)(1)(iii)(A), the limitation on
the fair market value of an employer-provided automobile first made available to
any employee for personal use after 1988
is to be adjusted in accordance with
§ 280F(d)(7). Accordingly, the adjustment for any calendar year is the percentage (if any) by which the CPI automobile
component for October of the preceding
calendar year exceeds the CPI automobile
component for October 1987 (See, section
4.02(1).) The new car component of the
CPI was 115.2 for October 1987 and
140.6 for October 1997. The October
1997 index exceeded the October 1987
index by 25.4. The Internal Revenue Service has, therefore, determined that the
adjustment for 1998 is 22.05 percent
(25.4/115.2 ⫻ 100%). This adjustment is
applicable to all employer-provided automobiles first made available to any employee for personal use in calendar year
1998. The maximum fair market value
specified in § 1.61–21(e)(1)(iii)(A) must
therefore be multiplied by a factor of
0.2205, and the resulting increase, after
rounding to the nearest $100, is added to
$12,800 to give the maximum value for
1998.
(2) The Maximum Automobile Value.
For automobiles first made available in
calendar year 1998 to any employee of
the employer for personal use, the vehicle
cents-per-mile valuation rule may be applicable if the fair market value of the automobile on the date it is first made available does not exceed $15,600.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective for
automobiles (other than leased automobiles) that are first placed in service during calendar year 1998, to leased automobiles that are first leased during calendar
year 1998, and to employer-provided automobiles first made available to employees for personal use in calendar year
1998.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Bernard P. Harvey of the Office of the Assistant Chief Counsel
(Passthroughs and Special Industries).

1998–17 I.R.B.

For further information regarding the depreciation limitations and lessee inclusion
amounts in this revenue procedure, contact Mr. Harvey at (202) 622-3110; for
further information regarding the maximum automobile value for applying the
vehicle cents-per-mile valuation rule,
contact Ms. Janine Cook of the Office of
the Associate Chief Counsel (Employee
Benefits and Exempt Organizations) at
(202) 622-6040 (not toll-free calls).

26 CFR 601.602: Tax forms and instructions.
(Also Part I, §§ 6302; 31.6302–1)

Rev. Proc. 98–32
Table of Contents
SECTION 1. PURPOSE
SECTION 2. BACKGROUND
SECTION 3. DEFINITIONS
SECTION 4. OVERVIEW
SECTION 5. REGISTRATION
SECTION 6. ASSIGNMENT TO A FINANCIAL AGENT
SECTION 7. AUTHORIZATIONS
SECTION 8. ENROLLMENT
SECTION 9. ACH DEBIT ENTRY
SECTION 10. ACH CREDIT ENTRY
SECTION 11. ELECTRONIC TAX APPLICATION TRANSACTION
SECTION 12. PROOF OF PAYMENT
SECTION 13. REFUNDS
SECTION 14. DISASTER PROCEDURES
SECTION 15. RESPONSIBILITIES OF
A FILER
SECTION 16. ADVERTISING STANDARDS
SECTION 17. REASONS FOR SUSPENSION
SECTION 18. ADMINISTRATIVE REVIEW PROCESS FOR
PROPOSED SUSPENSION
SECTION 19. EFFECT OF SUSPENSION
SECTION 20. APPEAL OF SUSPENSION
SECTION 21. PENALTIES
SECTION 22. FORMS, PUBLICATIONS, IMPLEMENTATION GUIDES, AND
ADDITIONAL INFORMATION
SECTION 23. EFFECT ON OTHER
DOCUMENTS

11

SECTION 24. EFFECTIVE DATE
SECTION 25. PAPERWORK REDUCTION ACT
SECTION 1. PURPOSE
This revenue procedure provides information about the Electronic Federal Tax
Payment System (EFTPS) programs for
Batch Filers and Bulk Filers (Filers).
EFTPS is an electronic remittance processing system for making federal tax deposits (FTDs) and federal tax payments
(FTPs). The Batch Filer and Bulk Filer
programs are used by Filers for electronically submitting enrollments, FTDs, and
FTPs on behalf of multiple taxpayers.
SECTION 2. BACKGROUND
.01 Section 6302(c) of the Internal
Revenue Code provides that the Secretary
of the Treasury (Secretary) may authorize
Federal Reserve banks, and incorporated
banks and other financial institutions that
are depositories or financial agents of the
United States, to receive any tax imposed
under the internal revenue laws, in such
manner, at such times, and under such
conditions as the Secretary may prescribe.
Section 6302(c) also provides that the
Secretary shall prescribe the manner,
times, and conditions under which the receipt of such tax by such banks and other
financial institutions is to be treated as a
payment of such tax to the Secretary.
.02 Section 6302(h) requires the Secretary to establish an electronic funds transfer (EFT) system to collect depositary
taxes (FTDs). EFTPS is the EFT system
developed by the Secretary to collect federal taxes (FTDs and FTPs). See
§ 31.6302–1(h)(4)(i) of the Employment
Tax and Collection of Income Tax at
Source Regulations, and Rev. Proc. 97–
33, 1997–30 I.R.B. 10.
.03 Some taxpayers are required by the
regulations issued under § 6302(h)
to make FTDs using EFTPS. See
§ 31.6302–1(h)(2)(i)(A). Taxpayers not
required to make FTDs using EFTPS may
choose to do so voluntarily. Taxpayers
also may choose to make FTPs using
EFTPS.
.04 All Filers using the Batch Filer or
Bulk Filer programs must comply with
this revenue procedure, and with the Implementation Guide for EFTPS Batch Filers, or the Implementation Guide for

April 27, 1998

EFTPS Bulk Filers, whichever is applicable.
.05 The two primary remittance methods in EFTPS are an Automated Clearing
House (ACH) debit entry and an ACH
credit entry. Filers may also use an Electronic Tax Application (ETA) transaction.
These remittance methods are defined in
section 3 and described in sections 9, 10,
and 11 of this revenue procedure.
.06 Filers participating in EFTPS must
ensure that taxpayers’ funds are remitted
on a timely basis. See § 31.6302–1(h)(8)
for rules regarding when an FTD remitted
by EFTPS is deemed made. For FTDs
and FTPs remitted by EFTPS, see
§ 31.6302–1(h)(9) for rules regarding
when the tax is deemed paid.
.07 If a taxpayer is required by regulations to make an FTD by EFTPS, a Filer
may not use a paper FTD coupon (Form
8109, Federal Tax Deposit Coupon) or the
magnetic tape FTD program (described in
Rev. Proc. 89–48, 1989–2 C.B. 599) to
make an FTD for the taxpayer. If a taxpayer is a voluntary participant in EFTPS
(that is, a participant not required by regulations to make an FTD by EFTPS) and
the Filer is unable, for any reason, to
make an FTD using EFTPS or chooses
not to use EFTPS to make an FTD, the
Filer may make a timely FTD for the taxpayer by using a paper FTD coupon, or
the magnetic tape FTD program if authorized by the taxpayer.
.08 EFTPS does not change the computation of tax liability, interest or penalties,
or FTD or FTP due dates.
SECTION 3. DEFINITIONS
.01 The definitions provided in this section will be used for the Batch Filer and
Bulk Filer programs.
.02 Administrative FRB Head Office
Local Zone Time. “Administrative FRB
Head Office Local Zone Time” is the
local zone time of the Administrative Federal Reserve Bank head office through
which a financial institution, or its authorized correspondent bank, sends a SameDay Payment.
.03 Authorization. An “Authorization”
is an instrument used by a taxpayer to
designate a Filer as the taxpayer’s agent
for submitting enrollments and for making FTDs or FTPs.
.04 Automated Clearing House (ACH).
“Automated Clearing House” is a funds

April 27, 1998

transfer system, governed by the ACH
Rules (the Operating Rules and the Operating Guidelines published by National
Automated Clearing House Association
(NACHA)) that provides for the interbank
clearing of electronic entries for participating financial institutions.
.05 ACH credit entry. An “ACH credit
entry” is a transaction in which a financial
institution, upon instructions from a Filer,
originates an FTD or FTP to the appropriate Treasury Department account through
the ACH system. An ACH credit entry is
a transfer of funds representing one FTD
or FTP. There are no “bulk” ACH credit
entries. See section 10 of this revenue
procedure for information on an ACH
credit entry.
.06 ACH debit entry. An “ACH debit
entry” is a transaction in which one of the
Financial Agents, upon instructions from
a Filer, instructs the Filer’s or the taxpayer’s financial institution to withdraw
funds from a designated account for an
FTD or FTP and to route the FTD or FTP
to the appropriate Treasury Department
account through the ACH system. A single ACH debit entry is a transfer of funds
representing one FTD or FTP. A bulk
ACH debit entry (a remittance method
available only in the Bulk Filer program)
is a transfer of funds representing multiple FTDs or FTPs. See section 9 of this
revenue procedure for information on an
ACH debit entry.
.07 Batch Filer. A Batch Filer is a Filer
that is registered under the Batch Filer
program. A Batch Filer submits multiple
electronic enrollment files at one time and
uses a personal computer or telephone for
making FTDs or FTPs.
.08 Bulk Filer. A Bulk Filer is a Filer
that is registered under the Bulk Filer program. A Bulk Filer uses Electronic Data
Interchange (EDI) files to transmit and receive enrollment or payment information.
A Bulk Filer also has additional remittance methods (bulk ACH debit entries
and bulk ETA entries).
.09 Electronic tax application (ETA)
transaction. An “ETA transaction” (also
referred to as “Same-Day Payment”) is a
transfer of funds through the ETA subsystem of EFTPS that receives, processes,
and transmits an FTD or FTP and the related tax payment information for SameDay Payments through Fedwire value
transfers, Fedwire non-value transactions,

12

and Direct Access transactions. A single
ETA transaction is a transfer of funds representing one FTD or FTP. A bulk ETA
transaction (a remittance method available only in the Bulk Filer program) is a
transfer of funds representing multiple
FTDs or FTPs. See section 11 of this revenue procedure for information on an
ETA transaction.
.10 Employer identification number
(EIN). An “EIN” is a unique nine digit
taxpayer identifying number issued by the
Internal Revenue Service to business taxpayers for the purpose of reporting tax related information.
.11 Federal Reserve Bank (FRB). The
“FRB” is the U.S. Government’s fiscal
agent. The FRB also processes ACH
transactions to a commercial financial institution account or to a Treasury Department account.
.12 Filer. A “Filer” is a person making
FTDs or FTPs on behalf of multiple taxpayers in the Batch Filer or Bulk Filer
program. Each Filer must be either the
taxpayer or a person authorized to act on
behalf of the taxpayer.
.13 Financial Agent. For purposes of
EFTPS, a “Financial Agent” (also referred to as a “Treasury Financial Agent”)
is a financial institution that is designated
as an agent of the Treasury Department.
The Secretary has designated NationsBank and First National Bank of Chicago
(First Chicago) to be the Financial Agents
for EFTPS. A Financial Agent processes
Batch Filer and Bulk Filer registrations,
processes taxpayer enrollments, receives
payment information, originates ACH
debit entries upon instructions from taxpayers or Filers, and provides customer
service assistance for EFTPS enrollment
and payment information.
.14 IRS individual taxpayer identification number (ITIN). An “ITIN” is a taxpayer identifying number issued by the
Service to an alien individual who is ineligible to receive a social security number
(SSN) for the purpose of reporting tax related information.
.15 Prenotification ACH credit. “Prenotification ACH credit” is a process
whereby a financial institution verifies the
appropriate Treasury Routing Transit
Number (RTN), the Treasury Department’s account number, and the taxpayer’s taxpayer identification number
(TIN).

1998–17 I.R.B.

.16 Prenotification ACH debit. “Prenotification ACH debit” is a process
whereby the appropriate Financial Agent
verifies the RTN of the financial institution, the account number, and the account
type.
.17 Social security number (SSN). An
“SSN” is a taxpayer identifying number
assigned to an individual or estate by the
Social Security Administration.
.18 Taxpayer identification number
(TIN). A “TIN” is a taxpayer identifying
number assigned to a taxpayer for the purpose of reporting tax related information.
A TIN includes an EIN, ITIN, or SSN.
SECTION 4. OVERVIEW
Filers must follow the following procedures to participate in the Batch Filer or
Bulk Filer programs:
(1) register as a Filer with the appropriate Financial Agent (see sections 5 and 6
of this revenue procedure);
(2) obtain an Authorization from each
taxpayer for which the Filer will be submitting enrollments and making FTDs or
FTPs, and submit these Authorizations to
the Service (see section 7 of this revenue
procedure); and
(3) enroll each of those taxpayers with
the appropriate Financial Agent (see section 8 of this revenue procedure).
SECTION 5. REGISTRATION
.01 A Filer may register for the Batch

Filer or Bulk Filer program if the Filer anticipates making FTDs or FTPs for multiple taxpayers.
.02 The Batch Filer program is recommended for Filers who anticipate submitting 50 or more enrollments. Additional
information for Batch Filers is furnished
in the Implementation Guide for EFTPS
Batch Filers. A copy of this implementation guide may be obtained from EFTPS
Customer Service (see section 22 of this
revenue procedure).
.03 The Bulk Filer program is recommended for Filers who anticipate making
750 or more FTDs or FTPs on a peak day.
Additional information for Bulk Filers is
furnished in the Implementation Guide
for EFTPS Bulk Filers. A copy of this implementation guide may be obtained from
EFTPS Customer Service (see section 22
of this revenue procedure).
.04 A Filer wanting to participate in either the Batch Filer or Bulk Filer program
must submit the appropriate registration
letter (also referred to as an “Agreement”). Some Bulk Filers may wish to
use the Batch Filer program as a backup.
To participate in both programs, a Filer
must submit a Batch Filer registration letter and a Bulk Filer registration letter.
Blank registration letter(s) may be obtained by contacting the appropriate Financial Agent (listed in section 6 of this
revenue procedure).
.05 A Filer must submit the registration
letter to the address designated in the in-

NationsBank (800) 555-4477
Alabama
American Samoa
Arizona
Arkansas
California (Los Angeles,
Orange, San Bernardino, Riverside, San Diego, and
Imperial counties only)
Commonwealth of the Northern Mariana Islands
Commonwealth of Puerto Rico
Delaware
District of Columbia
Florida
Georgia
Guam
Kentucky
Louisiana
Maryland
Mississippi
Nevada
New Mexico

1998–17 I.R.B.

structions accompanying the registration
letter.
.06 If an unregistered entity acquires a
registered Filer, a new registration letter
must be submitted by the unregistered entity if it wants to participate in either the
Batch Filer or Bulk Filer program.
.07 A Filer should notify the appropriate Financial Agent if the Filer chooses to
withdraw from either the Batch Filer or
Bulk Filer program. A Filer that is inactive in the Batch Filer or Bulk Filer program (that is, the Filer has submitted no
enrollments, FTDs, or FTPs in that program) for 6 months or more is treated as
having withdrawn from that program. If
a Bulk Filer uses the Batch Filer program
as a backup, the Filer must submit an
FTD or FTP through the Batch Filer program at least once every six months to
prevent the Filer from being treated as
having withdrawn from the Batch Filer
program. If a Filer withdraws (or is
treated as having withdrawn) from a program, the Filer must reregister to participate in that program.
SECTION 6. ASSIGNMENT TO A
FINANCIAL AGENT
.01 A Filer’s assignment to a Financial
Agent is based on the location of the
Filer’s principal place of business. Each
Financial Agent has responsibility for
certain geographic locations as listed
below:

First Chicago (800) 945-0966
Alaska
California (except Los Angeles, Orange, San Bernardino,
Riverside, San Diego, and Imperial counties)
Colorado
Connecticut
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Maine
Massachusetts
Michigan
Minnesota
Missouri
Montana
Nebraska
New Hampshire
New Jersey

13

April 27, 1998

NationsBank (800) 555-4477
North Carolina
Ohio
Oklahoma
Pennsylvania
South Carolina
Tennessee
Texas
U.S. Virgin Islands
Virginia
West Virginia

.02 If a Filer wants to use the other Financial Agent, the Filer must submit a
written request detailing the reasons for
the request and providing the name and
telephone number of a contact person.
This request may be submitted to:
FTD & Electronic Payments Section,
T:S:C:F
Internal Revenue Service
5000 Ellin Rd
Lanham, MD 20706
or faxed to FTD & Electronic Payments
Section at (202) 283-7434 (not a toll-free
number).
.03 A Filer, registered with a Financial
Agent on April 27, 1998, may continue
using the services of that Financial Agent,
regardless of the geographic assignments
in section 6.01 of this revenue procedure.
SECTION 7. AUTHORIZATIONS
.01 If a Filer is not the taxpayer, the
Filer must submit a taxpayer’s Authorization to the Service before submitting the
taxpayer’s enrollment to the Financial
Agent.
.02 Except as provided under the
grandfather rule in section 24.02 of this
revenue procedure, an Authorization must
be submitted on Form 8655, Reporting
Agent Authorization for Magnetic
Tape/Electronic Filers, or any other instrument that complies with Rev. Proc.
96–17, 1996–1 C.B. 633, as modified by
Rev. Proc. 97–47, 1997–42 I.R.B. 19.
.03 A Filer that acquires all or some of
the clients of another Filer must obtain
new Authorizations from those clients and
submit the new Authorizations to the Service before making FTDs and FTPs on
behalf of those clients.
.04 An Authorization permits a Filer to
submit enrollments and to make FTDs or
FTPs on behalf of a taxpayer. An Authorization may also permit the Filer to re-

April 27, 1998

First Chicago (800) 945-0966
New York
North Dakota
Oregon
Rhode Island
South Dakota
Utah
Vermont
Washington
Wisconsin
Wyoming
Foreign countries
ceive certain tax information on behalf of
the taxpayer. Although EFTPS is designed for the payment of various types of
tax, the Authorization may limit the types
of tax information the Filer is permitted to
receive. For example, a Filer may make
FTDs and FTPs on behalf of the taxpayer,
but may be authorized to receive only notices regarding FTDs for Form 941, Employer’s Quarterly Federal Tax Return,
and Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.
.05 Except as provided in section 7.07
of this revenue procedure, a Filer submitting Authorizations to the Service for the
Batch Filer and Bulk Filer programs on or
after April 27, 1998, must include a list of
all taxpayers for whom the Filer is submitting Authorizations. The list must include each taxpayer’s complete name (for
example, business name on file with Service), address (including zip code), and
TIN. EINs, SSNs, and ITINs should each
be grouped separately. Within each
group, the taxpayers must be listed in TIN
number sequence.
.06 Except as provided in section 7.07
of this revenue procedure, the Authorizations and the accompanying list must be
submitted to:
EFTPS Coordinator—Authorizations
5333 Getwell Road
Stop 532
Memphis, TN 38118
or faxed to the EFTPS Coordinator at
(901) 546-4112 (not a toll-free number).
.07 If a Filer has submitted Authorizations to the Service for the Form 941 ELF
program, as described in Rev. Proc. 97–
47, or the Form 941 or Form 940 Mag
Tape Programs, as described in Rev. Proc.
96–18, 1996–1 C.B. 637, and these Authorizations allow the Filer to make payments on behalf of the taxpayer, the Filer
is not required to resubmit the Authoriza-

14

tions or to submit a list containing those
Authorizations to the Service. Similarly,
if a Filer has submitted Authorizations to
the Service for the magnetic tape FTD
program, as described in Rev. Proc. 89–
48, the Filer is not required to resubmit
the Authorizations or to submit a list containing those Authorizations to the Service.
.08 To delete Authorizations that a Filer
previously submitted to the Service, the
Filer must submit a list of the taxpayers to
be deleted to the EFTPS Coordinator.
The list must be submitted in the format
prescribed in section 7.05 of this revenue
procedure and to the address (or fax number) provided in section 7.06 of this revenue procedure.
SECTION 8. ENROLLMENT
.01 A Filer must submit electronic taxpayer enrollments to the appropriate Financial Agent in accordance with the applicable implementation guide. As part of
completing each taxpayer enrollment, the
Filer may choose to use the ACH debit
entry or ACH credit entry remittance
method on a taxpayer-by-taxpayer basis.
In both the Batch Filer and the Bulk Filer
programs, enrollment of a taxpayer in the
ACH Debit remittance method will automatically enroll the taxpayer in the ACH
Credit remittance method. In the Bulk
Filer program, enrollment of a taxpayer in
the ACH Credit remittance method will
automatically enroll the taxpayer in the
ACH Debit remittance method. However, in the Batch Filer program, enrollment of a taxpayer in the ACH Credit remittance method will not automatically
enroll the taxpayer in the ACH Debit remittance method.
.02 The Financial Agent will verify the
accuracy of the enrollment information
for each taxpayer and enter the verified

1998–17 I.R.B.

enrollment information in its enrollment
record database. As part of the verification process for an ACH debit entry in the
Batch Filer program, the Financial Agent
will originate a prenotification ACH
debit, if requested by the Batch Filer. In
the Bulk Filer program, prenotification
ACH debits are not available. When a
prenotification ACH debit is not made,
the Filer assumes responsibility for the
accuracy of the information, including the
RTN of the financial institution.
.03 When the enrollment process for a
taxpayer is completed, the Financial
Agent will provide the Filer with an enrollment response record that either accepts or rejects the taxpayer’s enrollment.
A rejected enrollment will identify necessary corrections. Any necessary corrections must be submitted by the Filer as a
new enrollment of that taxpayer.
.04 If a Filer attempts to make an FTD
or FTP through EFTPS before a taxpayer
is enrolled, the FTD or FTP generally will
be rejected and the taxpayer may be subject to a penalty for a late FTD or FTP.
SECTION 9. ACH DEBIT ENTRY
.01 For an FTD or FTP to be timely, a
Filer must complete the initiation of an
ACH debit entry with a Financial Agent at
least one business day prior to the FTD or
FTP due date.
.02 A Filer may “warehouse” an ACH
debit entry for a business taxpayer by arranging for the entry up to 30 days in advance of the due date. A Filer may warehouse an ACH debit entry for an
individual taxpayer by arranging for the
entry up to 105 days in advance of the due
date.
.03 After a Batch Filer or a Bulk Filer
initiates a single ACH debit entry, the Financial Agent will validate the taxpayer’s
payment information and issue an acknowledgment number to the Filer. The
acknowledgment number verifies when
the necessary payment information was
received by a Financial Agent but does
not constitute proof of payment. See section 12 of this revenue procedure regarding proof of payment.
.04 After a Bulk Filer initiates a bulk
ACH debit entry, the Financial Agent will
validate the taxpayers’ payment information and issue acknowledgment numbers
to the Filer for accepted payments. The
Bulk Filer will receive an acknowledg-

1998–17 I.R.B.

ment number for the bulk ACH debit
entry and separate acknowledgement
numbers for each accepted FTD or FTP
included in the bulk ACH debit entry.
The acknowledgment numbers verify
when the necessary payment information
was received by a Financial Agent but do
not constitute proof of payment. See section 12 of this revenue procedure regarding proof of payment.
.05 In a bulk ETA debit entry, any rejected payment will be returned to the
Bulk Filer without an acknowledgement
number and subtracted from the bulk
ACH debit entry, as specified in the Implementation Guide for EFTPS Bulk Filers. The Bulk Filer assumes responsibility for reinitiating any rejected payments.
.06 Pursuant to the Filer’s instructions,
the Financial Agent, on the date designated by the Filer, will originate the transfer of funds from the taxpayer’s or Filer’s
account to the appropriate Treasury Department account. The Financial Agent
also will transmit the related payment information, supplied by the Filer, to the
Service for posting to the tax account(s)
of the taxpayer(s).
.07 The Service will deem an FTD or
FTP made by an ACH debit entry to have
been made at the time of the debit (that is,
when the amount is withdrawn from the
taxpayer’s or Filer’s account and not returned or reversed).
.08 When a timely ACH debit entry
cannot be made, a Filer may instruct the
Financial Agent to complete the transaction at the next opportunity to submit an
ACH debit entry. The Filer may also use
an ACH credit entry or an ETA transaction. If a taxpayer is not required to use
EFTPS for FTDs, the Filer may use a
paper FTD coupon or, if authorized by the
taxpayer, the magnetic tape FTD program.
To avoid penalties, the FTD or FTP must
be received by an appropriate means on or
before the FTD or FTP due date.
.09 The ACH Rules will govern ACH
debit entry returns and reversals.
SECTION 10. ACH CREDIT ENTRY
.01 If a Filer chooses the ACH credit
entry remittance method to make an FTD
or FTP, the Filer may use any financial institution capable of originating an ACH
credit entry.
.02 For each TIN used in making ACH
credit entries through a financial institu-

15

tion, the Filer may request that the financial institution originate a prenotification
ACH credit.
.03 To initiate a timely ACH credit
entry, a Filer must take into account the
financial institution’s deadline for originating an ACH credit entry.
.04 When a timely ACH credit entry
cannot be made, a Filer may instruct the
financial institution to complete the transaction at the next opportunity to submit an
ACH credit entry. The Filer may also
use an ETA transaction. A Bulk Filer may
initiate an ACH debit entry. However, a
Batch Filer may initiate an ACH debit
entry only if the taxpayer is enrolled for
the ACH debit remittance method. If a
taxpayer is not required to use EFTPS for
FTDs, the Filer may use a paper FTD
coupon or, if authorized by the taxpayer,
the magnetic tape FTD program. To
avoid penalties, the FTD or FTP must be
received by an appropriate means on or
before the FTD or FTP due date.
.05 The Financial Agent will receive
and process the ACH credit entry payment information. The Financial Agent
will compare the transaction’s payment
information with the taxpayer’s enrollment record. If they match, the Financial
Agent will send the payment information
to the Service for posting to the taxpayer’s tax account.
.06 If the Financial Agent cannot identify the taxpayer, the ACH credit entry
will be returned to the originating financial institution.
.07 Failure to provide correct, complete, and properly formatted payment information may cause an ACH credit entry
to be returned. In the event of a return, a
Filer may instruct the financial institution
to submit a corrected ACH credit entry at
the next opportunity to submit an ACH
credit entry. The Filer may also use an
ETA transaction. A Bulk Filer may initiate an ACH debit entry. However, a
Batch Filer may initiate an ACH debit
entry only if the taxpayer is enrolled for
the ACH debit remittance method. If a
taxpayer is not required to use EFTPS for
FTDs, the Filer may use a paper FTD
coupon or, if authorized by the taxpayer,
the magnetic tape FTD program. To
avoid penalties, the FTD or FTP must be
received by an appropriate means on or
before the FTD or FTP due date.
.08 An ACH Credit entry that is not returned or reversed will be deemed made

April 27, 1998

at the time that the funds are paid into the
appropriate Treasury Department account.
.09 The ACH Rules will govern ACH
credit entry returns and reversals.
SECTION 11. ELECTRONIC TAX
APPLICATION TRANSACTION
.01 A Filer may use an ETA transaction
to make an FTD or FTP. The Filer should
contact the financial institution through
which the ETA payment will be made to
determine if the financial institution is capable of making an ETA payment.
.02 A Bulk Filer may use a bulk ETA
transaction to make FTDs or FTPs. The
Bulk Filer should contact the financial institution through which the bulk ETA payment will be made to determine if the financial institution is capable of making a
bulk ETA payment.
.03 If a Filer uses a single ETA transaction, the transfer of funds and the transmission of the related payment information occur together. If a Bulk Filer uses a
bulk ETA transaction, the transmission of
the payment information precedes the related transfer of funds, both of which
occur on the same day.
.04 The Service generally will deem an
ETA payment to have been made on the
date the payment is received by the FRB.
A Filer should contact the financial institution through which the ETA payment
will be made to determine the deadline for
initiating ETA payments for a particular
day. ETA payments received by the FRB
after the deadline set forth in the Treasury
Financial Manual, Volume IV (IV TFM),
will not be accepted. Currently, the deadline in IV TFM is 2:00 p.m. Administrative FRB Head Office Local Zone Time.
If a payment is not accepted, the Filer
must reoriginate the payment using an
ETA transaction or any other permissible
remittance method.
.05 Additional ETA information may be
found in the sections on Same-Day Payments in the Implementation Guide for
EFTPS Bulk Filers and the EFTPS Payment Instruction Booklets for businesses.
SECTION 12. PROOF OF PAYMENT
.01 For an ACH debit or credit entry
posted to the taxpayer’s account in a financial institution, a statement prepared

April 27, 1998

by that financial institution showing a
transfer (that is, a decrease to the taxpayer’s account balance) will be accepted
as proof of payment if the statement:
(1) shows the amount and the date of
the transfer; and
(2) identifies the U.S. Government
as the payee (for example, “USA tax”).
.02 For an ETA payment posted to the
taxpayer’s account in a financial institution, a taxpayer may request that its financial institution obtain a statement from the
FRB that executed the transfer. This
statement will be accepted as proof of
payment if the statement:
(1) shows the amount and the date of
the transfer; and
(2) identifies the U.S. Government
as the payee (for example, “USA tax”).
.03 For purposes of this section, statements prepared by a financial institution
include statements prepared by a third
party that is contractually obligated to
prepare statements for the financial institution.
.04 A taxpayer’s payment to a Filer (including a subsidiary’s payment to its parent) is not a payment of tax by the taxpayer. Therefore, a statement prepared by
the taxpayer’s financial institution showing a transfer from the taxpayer’s account
to the Filer as payee is not proof of payment. Further, a statement prepared by
the Filer’s financial institution showing a
transfer of funds from the Filer’s account
to the U.S. Government is not proof of
payment because the payment may not
have been made on behalf of the taxpayer.
The taxpayer will need the acknowledgement number for an FTD or FTP made
from the Filer’s account to establish that
the FTD or FTP was made on behalf of
the taxpayer. The acknowledgement
number allows the Service to trace the
payment. The Filer has the acknowledgement number or may obtain it from the Financial Agent.
SECTION 13. REFUNDS
No refunds of FTDs or FTPs will be
made through EFTPS. However, a refund
request may be made using existing tax
refund procedures. If a taxpayer’s error
results in a significant hardship, the taxpayer may contact the Service at (800)
829-1040 for assistance.

16

SECTION 14. DISASTER
PROCEDURES
.01 A taxpayer’s ability to make FTDs
and FTPs timely may be affected by the
time, severity, and extent of a major disaster. In such circumstances, the Service
provides relief through the nonassertion
or abatement of certain penalties. The
Service publicizes the relief for a particular disaster area through the publication of
a News Release, Notice, or Announcement. Generally, the Service identifies
the taxpayers who qualify for this disaster
relief.
.02 If a disaster affects a Filer, the Filer
should provide the Service with the information necessary to identify those FTDs
and FTPs of taxpayers outside the disaster
area which were or will be late due to the
disaster. The Service will then determine
if the nonassertion or abatement of certain
penalties is appropriate.
.03 In addition, if a Bulk Filer’s primary processing system is affected by a
disaster and the Bulk Filer’s backup processing system fails, the Bulk Filer may
use an emergency bulk ETA transaction
under which the transfer of funds occurs
before the transmission of the related payment information.
SECTION 15. RESPONSIBILITIES OF
A FILER
.01 Each Filer must:
(1) comply with this revenue procedure and the applicable implementation
guide (Implementation Guide for EFTPS
Batch Filers or Implementation Guide for
EFTPS Bulk Filers);
(2) maintain a high degree of integrity, compliance, and accuracy;
(3) ensure that FTDs and FTPs are
accurately and timely made;
(4) ensure the security of all transmitted information; and
(5) ensure that after a disabling event
the Filer is able to operate its Batch Filer
or Bulk Filer programs with minimal interruption (generally, less than 24 hours).
.02 A Filer that is not the taxpayer
must:
(1) retain copies of each Authorization and each enrollment at its principal
place of business for 4 years after the prescribed due date of the last return to
which the any FTD or FTP relates, unless

1998–17 I.R.B.

the Filer is otherwise notified by the Service;
(2) retain any payment information
(including acknowledgement numbers) at
its principal place of business for 4 years
after the prescribed due date of the return
to which the FTD or FTP relates, unless
the Filer is otherwise notified by the Service. A shorter retention period for payment information may be substituted for
this “4-year” retention period, provided
the Filer notifies the taxpayer in writing
that the Filer will not be retaining the payment information after the shorter retention period and the Filer gives such information to the taxpayer. The shorter
retention period must be at least 90 days;
and
(3) advise the taxpayer to enroll itself separately in EFTPS. If the Filer is
not authorized to make all the taxpayer’s
required FTDs and FTPs, the taxpayer’s
separate enrollment will allow the taxpayer to make its own FTDs and FTPs
through EFTPS. To enroll separately, a
taxpayer must submit a completed Form
9779, EFTPS Business Enrollment Form,
or Form 9783, EFTPS Individual Enrollment Form, to the EFTPS Enrollment
Processing Center at the address provided
in the applicable form’s instructions. See
Rev. Proc. 97-33 for more information.
.03 A Filer that is the taxpayer must:
(1) absent a specific retention period
prescribed by regulations, retain the payment information and any supporting material at its principal place of business for
as long as the contents thereof may become material in the administration of
any internal revenue law; and
(2) retain copies of each enrollment
at its principal place of business for 4
years after the prescribed due date of the
return to which the last FTD or FTP relates, unless otherwise notified by the
Service.
SECTION 16. ADVERTISING
STANDARDS
.01 A Filer must comply with the advertising and solicitation provisions of 31
C.F.R. Part 10 (Treasury Department Circular No. 230). This circular prohibits the
use or participation in the use of any form
of public communication containing a
false, fraudulent, misleading, deceptive,
unduly influencing, coercive, or unfair
statement or claim.

1998–17 I.R.B.

.02 A Filer must adhere to all relevant
federal, state, and local consumer protection laws that relate to advertising and soliciting.
.03 A Filer must not use the Service’s
name, “Internal Revenue Service” or
“IRS”, within a firm’s name.
.04 A Filer must not use improper or
misleading advertising in relation to
EFTPS.
.05 Advertising materials must not
carry the Service, FMS, or other Treasury
Seals.
.06 If a Filer uses radio or television
broadcasting to advertise, the broadcast
must be pre-recorded. The Filer must
keep a copy of the pre-recorded advertisement for a period of at least 36 months
from the date of the last transmission or
use.
.07 If a Filer uses direct mail or fax
communications to advertise, the Filer
must retain a copy of the actual mailing or
fax, along with a list or other description
of the firms, organizations, or individuals
to whom the communication was mailed,
faxed, or otherwise distributed for a period of at least 36 months from the date of
the last mailing, fax, or distribution.
.08 If a Filer uses a Web site or print
media (including newspapers, magazines,
or yellow pages) to advertise, the Filer
must retain a copy of the advertising for a
period of at least 36 months from the date
of the last posting or publication.
.09 Acceptance in the Batch Filer or
Bulk Filer programs is not an endorsement by the Service, FMS, or the Treasury Department of the quality of the services provided by the Filer.
SECTION 17. REASONS FOR
SUSPENSION
.01 The Service reserves the right to
suspend a Filer from the Batch Filer or
Bulk Filer programs for the following reasons (this list is not all-inclusive):
(1) failing to submit payment information in accordance with this revenue
procedure and the applicable implementation guides;
(2) failing to maintain and make
available the required records for the period specified in section 15 of this revenue procedure;
(3) submitting payment information
on behalf of taxpayers for which the Service did not receive Authorizations;

17

(4) failing to abide by the advertising
standards in section 16 of this revenue
procedure;
(5) failing to cooperate with the Service’s efforts to monitor Filers and investigate abuse in the Batch Filer or Bulk
Filer programs; or
(6) generating significant complaints
about the Filer’s performance in the Batch
Filer or Bulk Filer programs.
.02 If the Service informs a Filer that a
certain action is a reason for suspension
and the action continues, the Service may
send the Filer a notice proposing suspension of the Filer from the Batch Filer or
Bulk Filer program. However, a notice
proposing suspension may be sent without a warning if the Filer’s action indicates an intentional disregard of rules. A
notice proposing suspension will describe
the reason(s) for the proposed suspension,
and indicate the length of the suspension
and the conditions that need to be met before the suspension will terminate.
SECTION 18. ADMINISTRATIVE
REVIEW PROCESS FOR PROPOSED
SUSPENSION
.01 A Filer that receives a notice
proposing suspension from the Batch
Filer or Bulk Filer program, as described
in section 17.02 of this revenue procedure, may request an administrative review prior to the proposed suspension
taking effect.
.02 The request for an administrative
review must be in writing and contain detailed reasons, with supporting documentation, for withdrawal of the proposed
suspension.
.03 The written request for an administrative review and a copy of the notice
proposing suspension must be delivered
to the address designated in the notice
within 30 days of the effective date on the
notice.
.04 After consideration of the written
request for an administrative review, the
Service will either issue a suspension letter or notify the Filer in writing that the
proposed suspension is withdrawn.
.05 If a Filer receives a suspension letter, the Service’s subsequent determination of whether a reason for suspension
has been corrected is not subject to administrative review or appeal.
.06 Failure to submit a written request
for an administrative review within the

April 27, 1998

30-day period described in section 18.03
of this revenue procedure irrevocably terminates the Filer’s right to an administrative review of the proposed suspension,
and the Service will issue a suspension
letter.

.03 Failure to appeal within the 30-day
period described in section 20.02 of this
revenue procedure irrevocably terminates
the Filer’s right to appeal the suspension
under section 20.01 of this revenue procedure.

SECTION 19. EFFECT OF
SUSPENSION

SECTION 21. PENALTIES

.01 The Filer’s suspension will continue for the length of time specified in
the suspension letter, or until the conditions for terminating the suspension have
been met, whichever is later.
.02 After suspension, a Filer may submit an FTD under the Batch Filer or Bulk
Filer program only if the FTD is due not
more than 30 days after the effective date
on the suspension letter. No FTPs may be
submitted by the Filer under the Batch
Filer or Bulk Filer programs during the
suspension period.
.03 A Filer must provide written notification of a suspension from the Batch
Filer or Bulk Filer programs to each taxpayer in the program(s) within 10 days
from the date on the suspension letter.
This notification must be provided even
though the Filer may believe that the Filer
will be able to meet the conditions for terminating the suspension within the 30day period provided in section 19.02 of
this revenue procedure.
.04 A Filer will be able to submit payment information under the Batch Filer or
Bulk Filer programs without reregistering
for those programs after:
(1) the stated suspension period expires; and
(2) the reason(s) for suspension are
corrected.
SECTION 20. APPEAL OF A
SUSPENSION
.01 If a Filer receives a suspension letter from the Service, the Filer is entitled
to appeal, by written protest, to the Service. The written protest must be delivered to the address designated on the suspension letter. During the appeals
process, the suspension remains in effect.
.02 The written protest must be received by the Service within 30 days of
the effective date on the suspension letter.
The written protest must contain detailed
reasons, with supporting documentation,
for withdrawal of the suspension.

April 27, 1998

.01 Section 6656 imposes a failure-todeposit penalty if a taxpayer does not
make a timely FTD, unless such failure is
due to reasonable cause and not due to
willful neglect. See Rev. Rul. 94–46,
1994–2 C.B. 278. Absent reasonable
cause, a taxpayer that is required to deposit federal taxes by EFTPS is subject to
the failure-to-deposit penalty if FTDs are
made by means other than EFTPS (for example, using a paper FTD coupon). See
Rev. Rul. 95–68, 1995–2 C.B. 272. However, for a taxpayer that was first required
to deposit by EFTPS on or after July 1,
1997, this penalty will not be imposed
solely by reason of a failure to deposit by
EFTPS prior to July 1, 1998.
.02 Section 6655 imposes a penalty for
underpayments of estimated tax by a corporation, private foundation, tax-exempt
organization, or qualified settlement fund.
.03 Section 6651 imposes a failure-topay penalty if a taxpayer does not make a
timely FTP, unless such failure is due to
reasonable cause and not due to willful
neglect.
SECTION 22. FORMS,
PUBLICATIONS, IMPLEMENTATION
GUIDES, AND ADDITIONAL
INFORMATION
.01 A Filer may obtain copies of this
revenue procedure, enrollment forms
(Forms 9779 and 9783), implementation
guides, payment instruction booklets, registration letters, and additional information on EFTPS by calling EFTPS Customer Service at (800) 945-0966 (First
Chicago) or (800) 555-4477 (NationsBank).
.02 A Filer may obtain enrollment
forms and Authorizations (Forms 8655)
by calling the IRS Distribution Center at
(800) TAX-FORM ((800) 829-3676).
.03 A Filer may obtain information on
the submission of Authorizations by calling the EFTPS Coordinator at (901) 5464103 (not a toll-free call).

18

SECTION 23. EFFECT ON OTHER
DOCUMENTS
Section 9.03 of Rev. Proc. 97–33,
1997–30 I.R.B. 10, 13, is modified to provide the same rule (regarding the FRB’s
nonacceptance of late ETA payments) as
set forth in section 11.04 of this revenue
procedure.
SECTION 24. EFFECTIVE DATE
.01 In general. This revenue procedure
is effective April 27, 1998.
.02 Grandfather rule. A power of attorney on Form 2848, Power of Attorney and
Declaration of Representative, or other
document that satisfies the requirements
of § 601.503(a) of the Statement of Procedural Rules, that was submitted to the
Service on or before April 27, 1998, will
be treated as an Authorization for purposes of this revenue procedure, even
though it does not comply with section
7.02 of this revenue procedure.
SECTION 25. PAPERWORK
REDUCTION ACT
The collections of information contained in this revenue procedure have
been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545-1601.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless the collection of information displays a valid
control number.
The collections of information in this
revenue procedure are in sections 5, 6, 7,
8, 12, 14, 15, and 16 of this revenue procedure. This information is required to
implement EFTPS, and verify that taxpayers have met their obligations to pay
their taxes and make FTDs by EFTPS.
This information will be used to identify
persons paying taxes and making FTDs
on behalf of taxpayers and to credit taxpayers’ tax accounts for FTDs and FTPs
made through EFTPS. The collections of
information are mandatory. The likely respondents are business or other for-profit
institutions.
The estimated total annual reporting
and recordkeeping burden will be 51,885
hours.

1998–17 I.R.B.

The estimated annual burden per respondent/recordkeeper will vary from 71
hours to 91 hours, depending on individual circumstances, with an estimated average of 74.33 hours. The estimated number

1998–17 I.R.B.

of respondents and recordkeepers is 620.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection of information must be retained as

19

long as their contents may become material in the administration of any internal
revenue law. Generally tax returns and
tax return information are confidential, as
required by 26 U.S.C. 6103.

April 27, 1998