Delaware Business Blog

IRS discontinues 941TeleFile

If you are a business owner who handles your own payroll & related filings with the IRS, then you need to listen up.
You probably already know that your quarterly 941 reconciliation for the second quarter (tax period April thought June) is due by July 31st, 2005. What you may have been dismayed to learn is that this is the last tax period that you can file your 941 reconciliation via TeleFile. In fact, the last day the 941 TeleFile System can be used is August 11, 2005.

Here’s the story:
Beginning August 16, 2005, the entire IRS TeleFile system is permanently discontinued. The TeleFile System includes 941 & 940 business filers, as well as 4868 and 1040EZ individual filers.

As a business owner, I can say that this is very inconvenient.

The IRS has tried to make it seem as though they are offering comparable service in their highly touted e-file options, but the truth is that e-file is not hassle free, and in fact, it is not free at all!

That’s right, if you want to e-file, you need to purchase compatible software (one IRS customer service representative told me it was in the neighborhood of $500.00), or hire an approved IRS e-file for Business Provider or Partner that meets your filing needs. Translation- pay a service company per filing to handle it for you.
Don’t like those options? You can still file the old fashioned way and mail in your completed paperwork.

Back to paper, now that’s progress!

2 thoughts on “IRS discontinues 941TeleFile

  1. Anonymous

    I think this a huge step backwards for the IRS. Now is a time to embrace technology, not outsource it.

    While I think it is admirable that the IRS is getting involved in creating capitalist opportunities for business that want to become an approved e-file Business Provider, it also is bound to hurt the little guy. Basically, they are saying to the small businesses of America- back to the paper shuffle, or pay up.

    I’m going to go out on a limb here and say that most Americans have gotten used to the fact of life we call taxes. So I don’t want to imply that this is an issue over paying taxes. On the contrary, the issue for me is the inability of the IRS to become a taxpayer friendly organization. Yes, that’s right. The IRS should make it easy for everyone to pay taxes and not be obstructionist to that end. After all, they are a taxpayer funded agency!

    As far as the 941 quarterly reconciliation is concerned, in my opinion, it is an absolute waste of time. After all, it is the same information that I send to the IRS every month.

    How about if the IRS provided and maintained a real e-file system where they could then run their own reconciliation of the 941 deposits that I have already filed electronically with their office?

    That might actually allow them to collect more taxes and implement better tax compliance controls.

    It almost seems that there is someone in government somewhere who is actively working to prevent that.

    A move like eliminating the TeleFile unit without substituting a better program in it’s place make the IRS look foolish and hostile.

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