E-filing employment taxes.

• Author: Laffie, Lesli S.
• Position: From The IRS

IR 2003-25 discusses the IRS's new employment tax e-filing system, which is intended to reduce the paperwork burden on small businesses. The enhanced system is part of a continuing effort to reduce e-filing barriers for small businesses.

The IRS worked with small business taxpayers, software developers and tax professionals to determine users' needs and increase the volume of e-filed payroll returns. Based on feedback, it devised a system to promote the development of integrated software products. The result is e-file capability for the software product that a business or tax adviser already uses to manage payroll.

Key benefits of the new system are:

* More flexible filing. Small businesses can file Forms 941, Employer's Quarterly Federal Tax Return, and 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, in a single transmission.

* More specific error conditions. New error conditions pinpoint an error's location and provide complete information for each one identified.

* Faster acknowledgments. The system processes transmissions on receipt and returns an acknowledgment in near...