What Are the Dangers of Using the Electronic Federal Tax Payment System (EFTPS)?

Jean Folger has 15+ years of experience as a financial writer covering real estate, investing, active trading, the economy, and retirement planning. She is the co-founder of PowerZone Trading, a company that has provided programming, consulting, and strategy development services to active traders and investors since 2004.

Ebony Howard is a certified public accountant and a QuickBooks ProAdvisor tax expert. She has been in the accounting, audit, and tax profession for more than 13 years, working with individuals and a variety of companies in the health care, banking, and accounting industries.

Amanda Jackson has expertise in personal finance, investing, and social services. She is a library professional, transcriptionist, editor, and fact-checker.

The Electronic Federal Tax Payment System (EFTPS) is a free tax payment service offered by the U.S. Department of the Treasury to help individual and business taxpayers pay their federal taxes electronically.

To use the service, you must first enroll online by entering your taxpayer identification number (your employer identification number (EIN) if you're enrolling as a business, or your Social Security Number (SSN) if you're enrolling as an individual), your bank account information, and your name and address as they appear on your IRS documents.

Approximately one week after you enroll online, you will receive a PIN (personal identification number) in the mail you can use to complete your online registration and begin making payments.

Key Takeaways

• The Electronic Federal Tax Payment System (EFTPS) is a 24/7 service provided by the U.S. Department of the Treasury that allows taxpayers to make tax payments either by telephone or online.
• While EFTPS uses secure servers, scammers pose the potential for phishing scams that try to acquire individuals' personal information.
• 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.

Scams Affecting the EFTPS

Phishing scams are one of the potential dangers of using the EFTPS system. These scams occur outside of the EFTPS website. For example, fraudulent emails targeting EFTPS users could send out an email with an IRS-related subject line asking the taxpayer to take action. A link in the email could prompt recipients to update their information, but instead, will install malware used to intercept the taxpayers' online banking information

The IRS website warns, "The IRS doesn't initiate contact with taxpayers by email, text messages, or social media channels to request personal or financial information. This includes requests for PIN numbers, passwords, or similar access information for credit cards, banks, or other financial accounts. Report all unsolicited emails claiming to be from the IRS or an IRS-related function to phishing@irs.gov."

Note

Certain taxpayers may file their federal tax returns online for free directly with the IRS through the Direct File program. This service is available to people who lived in the following states in 2023: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. Tax filers must submit state tax returns separately. Refer to the IRS website to see if you qualify.

Protecting Sensitive Information

The EFTPS website protects sensitive tax payment data by using "firewalls and implemented internal security policies to ensure you and only you can make, cancel, and inquire about your tax payments." According to the EFTPS website, "Every secure interaction involving EFTPS online requires identification and authentication of each user.

EFTPS online identifies and authenticates each taxpayer using their Taxpayer Identification Number (EIN or SSN), Personal Identification Number (PIN), and Internet password. Without these key pieces of information, you may not use many of the functions of EFTPS online."

What Is the Electronic Federal Tax Payment System EFTPS?

The Electronic Federal Tax Payment System EFTPS is a free tax payment service that helps individual and business taxpayers pay their federal taxes electronically. You have to enroll online to participate.

Is EFTPS the Same as IRS Direct Pay?

No, the Electronic Federal Tax Payment System (EFTPS) is not the same as Direct Pay. While both are offered by the IRS and allow the payment of taxes, there are differences in the system. Direct Pay does not require registration whereas EFTPS does. EFTPS also allows for more current or future payments within a set number of days. Generally, EFTPS is better suited for business payments and for those making more frequent payments, whereas Direct Pay is better suited for individuals and those who have not used EFTPS before.

Who Needs to Pay EFTPS?

The Electronic Federal Tax Payment System (EFTPS) is not mandatory and no one or business needs to use it. Individuals and businesses have the option to use the system to pay taxes. They must enroll and follow the instructions and rules outlined in the process if they choose to do so.

The Bottom Line

Like any electronic form of interaction, the IRS Electronic Federal Tax Payment System (EFTPS) is prone to security risks. Scammers can find ways to retrieve your personal information and use that information against you. When interacting with any IRS communication and the EFTPS system, ensure that you are following IRS protocol on their website and know that the IRS does not contact individuals directly, ever, or ever request information.