Recommendations concerning electronic funds transfer procedures.

• Author: Burk, William M.
• Position: Letter to Harley T. Duncan, Executive Director of Federation of Tax Administrators

Recommendations Concerning Electronic Funds Transfer Procedures February 28, 1990

On February 28, 1990, TEI President William M. Burk wrote to Harley T. Duncan, Executive Director of the Federation of Tax Administrators (FTA), concerning the FTA's draft recommendations for electronic funds transfer procedures for the payment of state taxes. The draft recommendations were developed following a January 5, 1990, hearing at which TEI and other interested parties testified. (The Institute's testimony was reprinted in the January-February 1990 issue of The Tax Executive). Mr. Burk's February 28 letter to Mr. Duncan is reprinted below.

On behalf of Tax Executives Institute, I am pleased to submit the following comments on the Federation of Tax Administrator's draft electronic funds transfer (EFT) recommendations, which were released by the FTA on January 29, 1990.

TEI appreciates the leadership that the Federation of Tax Administrators has displayed in developing EFT guidelines for the payment of state taxes. As we emphasized in our January 5, 1990, testimony, EFT uniformity is of paramount concern to the business taxpayers represented by TEI's membership, and we believe that the process the FTA has followed in developing its draft recommendations bodes well for the implementation of fair and efficient EFT systems.

On the whole, we believe the FTA has done a commendable job of balancing the comments received from state tax administrators, TEI, and other interested parties. Although not all the positions set forth in our January 5 testimony have been adopted in the draft recommendations, we do believe that the FTA has been responsive to legitimate business concerns and realities. We are especially pleased with the FTA's recommendations in respect of timely payment and the proposed due diligence exception (pages 7 and 8 of the FTA paper).(*) In addition, we wish to affirm our willingness to cooperate, as part of the National Automated Clearing House Working Group on Acknowledgments or otherwise, in addressing unresolved proof-of-payment issues.

TEI generally supports the proposed guidelines in respect of filing thresholds and the imposition of EFT obligations (page 4 of the FTA paper). In particular, we appreciate the rationale underlying the proposal that taxpayers meeting the thresholds be required to make EFT payments for a one-year period at which time there would be a redetermination whether the EFT thresholds are still met. We recommend...