If you are a business whose tax deposits for one calendar year exceed $200,000 then you are required to use the IRS Electronic Federal Tax Payment System (EFTPS) starting in the second succeeding calendar year. For example if you paid out $245,000 in taxes to the IRS in 1998, then beginning in 2000, you have to start using the EFTPS. If you dont, you will charged a 10% penalty. Any businesses that make payments from $20,000 to $200,000 in tax deposits are not required but are recommended by the IRS to use this system.
This even applies after once you start to use EFTPS and your tax deposits fall below the limit ($200,000). Following is a list of forms that EFTPS applies to:
Enrollment forms can be obtained by calling 1-800-945-8400 or 1-800-555-4477. Tax payments can be made from the computer, telephone, or your bank or financial institution.