If your client is a business whose tax deposits for one calendar year exceed $200,000 then they are required to use the IRS Electronic Federal Tax Payment System (EFTPS) starting in the second succeeding calendar year. For example if your client paid out $245,000 in taxes to the IRS in 1998, then beginning in 2000, they have to start using the EFTPS. If your client doesnt, they will charged a 10% penalty. Any businesses that makes 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 your client starts to use EFTPS and their 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.