June 2, 1997
Washington, D.C. -- The National Association for the Self-Employed today applauded the Internal Revenue Service for waiving penalties for small businesses that make mistakes or fail to file their taxes electronically by July 1, 1997. The agency announced today that it will not impose penalties through December 31, 1997, on businesses that make timely deposits using paper federal tax deposit coupons while converting to the new system.
"The IRS has done what's right for small businesses," said NASE President Bennie L. Thayer. "The agency has acknowledged that banks are not ready, accountants are not ready, and small businesses are not ready for a massive increase in electronic tax filing. The six-month waiver of penalties will give everyone vitally needed time to get the new system up and running. We commend agency leadership for acknowledging these problems and responding responsibly, before the situation became a crisis.
"The NASE also thanks Senate Small Business Committee Chairman Kit Bond (R-MO), Senator Don Nickles (R-OK), House Small Business Committee Chairman Jim Talent (R-MO), and Representative Doc Hastings (R-WA) for working to solve this problem legislatively," Thayer added.
Under legislation implementing the North American Free Trade Agreement, all businesses that pay $50,000 or more in payroll taxes were required to file their taxes through the Electronic Federal Tax Payment System (EFTPS). Businesses with about ten employees could be required to use the system. The original EFTPS deadline was January 1, 1997, but, realizing the program was unworkable, House Ways and Means Committee Chairman Bill Archer (R-TX) and other committee members last year spearheaded legislation to delay the date. However, problems persisted.
"We believe that the business community continues to be confused even today with all aspects, details, and requirements of the EFTPS program," Thayer continued. "And unfortunately, today's level of confusion appears to be very comparable to the high degree of confusion which existed last year among business owners.
"We thank the IRS for working on behalf of small-business owners with this issue," Thayer concluded. "We hope that all problems associated with EFTPS will be resolved by January, one way or another."
Founded in 1981, the National Association for the Self-Employed represents over 320,000 small business people nationwide. The largest small business association of its kind, serving the needs of the smallest of small business, NASE's primary goal is to help small businesses become more competitive by providing benefits and services that will meet its members' business, financial and personal needs.
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