SECTION 2. BACKGROUND

.01 Section 6302(c) of the Internal Revenue Code provides that the Secretary of the Treasury (Secretary) may authorize Federal Reserve banks, and incorporated banks and other financial institutions that are depositories or financial agents of the United States, to receive any tax imposed under the internal revenue laws, in such m a n n e r, at such times, and under such conditions as the Secretary may prescribe. Section 6302(c) also provides that the Secretary shall prescribe the manner, times, and conditions under which the receipt of such tax by such banks and other financial institutions is to be treated as a payment of such tax to the Secretary.

.02 Section 6302(h) requires the Secretary to establish an EFT system to collect the FTDs of certain taxpayers. TA X L I N K and its successor, EFTPS, are the EFTs y stems developed by the Secretary to collect federal taxes. The TAXLINK system will terminate on July 15, 1997. All taxpayers making FTDs or FTPs by EFT must use EFTPS after July 15, 1997.

.03 Some taxpayers are required by regulations issued under § 6302(h) to make FTDs using an EFT system. S e e § 31.6302–1(h)(2)(i)(A) of the Employment Taxes and Collection of Income Tax at Source Regulations. Taxpayers not required to make FTDs using an EFT system may choose to do so voluntarily. Taxpayers also may choose to make FTPs using EFTPS.

.04 All taxpayers participating in EFTPS must comply with this revenue procedure.

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sury (Treasury) account through the ACH system. See section 8 of this revenue procedure for a description of an ACH credit entry.

.04 ACH DEBIT E N T RY. An “ACH debit entry” is a transaction in which one of the Treasury Financial Agents, upon instructions from a taxpayer, instructs the t a x p a y e r’s financial institution to withdraw funds from the taxpayer’s account for an FTD or FTP and to route the FTD or FTP to the appropriate Treasury account through the ACH system. See section 7 of this revenue procedure for a description of an ACH debit entry.

.05 CASH CONCENTRATION OR DISBURSEMENT+ TAX PAY M E N T A D D E N D ARECORD (CCD+ TXP). T h e “CCD+ TXP” is NACHA’s tax payment convention that will be used to facilitate the transmission of the tax payment information associated with an ACH credit entry to the appropriate Financial A g e n t . This convention consists of the CCD+ electronic funds transfer transaction and an addenda record for tax payments identified by the three characters, “TXP”. The A C H T X Paddenda record includes the Ta x p a y e r Identification Number (TIN) ( i . e ., E mployer Identification Number (EIN), IRS Individual Taxpayer Identification Number (ITIN), or Social Security Number (SSN)), the tax type code, the tax period end date, and the FTD or FTPamount.

.06 ELECTRONIC FUNDS TRANSFER (EFT). An “EFT” is any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution or other financial intermediary to debit or credit an account.

.07 ELECTRONIC TAX A P P L I C ATION (ETA). “ETA” (also referred to as “Same Day Payment”) is a subsystem of EFTPS that receives, processes, and transmits an FTD or an FTP and the related tax payment information for taxpayers that make same day payments through Fedwire value transfers, Fedwire non–value transactions, and Direct A ccess transactions. See section 9 of this revenue procedure for information on the ETAprocess. For more information about E TA payments, taxpayers should contact their financial institutions.

.08 EMPLOYER IDENTIFICAT I O N NUMBER (EIN). An “EIN” is a unique nine digit taxpayer identifying number issued by the Internal Revenue Service to business taxpayers for the purpose of reporting tax related information.

.09 FEDERAL R E S E RVE BANK (FRB). The “FRB” is the U.S. Governm e n t ’s fiscal agent. The FRB also processes ACH transactions to a commercial financial institution account or to a Treasury account.

.10 FRB HEAD OFFICE LOCAL ZONE TIME. “FRB Head Office Local Zone Time” is the local zone time of the FRB head office through which a financial institution, or its authorized correspondent bank, sends a same–day payment.

. 11 FINANCIAL A G E N T. For purposes of EFTPS, a “Financial Agent” (also referred to as a “Treasury Financial Agent”) is a financial institution that is designated as an agent of Tr e a s u r y. T h e Secretary has designated NationsBank and First National Bank of Chicago (First Chicago) to be the Financial Agents for EFTPS. A Financial Agent processes EFTPS enrollments, receives FTD and F T Pinformation, originates ACH debit entries upon instructions from taxpayers, and provides customer service assistance for EFTPS enrollment and payment informat i o n .

.12 IRS INDIVIDUAL TA X PAY E R I D E N T I F I C ATION NUMBER (ITIN). An “ITIN” is a taxpayer identifying number issued by the Service to an alien individual who is ineligible to receive an SSN for the purpose of reporting tax related information.

.13 PRENOTIFICATION A C H C R E D I T. “Prenotification ACH credit” is a process whereby a taxpayer’s financial institution originates a zero dollar entry to the appropriate Treasury Routing Tr a n s i t Number (RTN) to verify the Tr e a s u r y RTN, the Tr e a s u r y ’s account number, and the taxpayer’s TIN. See section 8.02 of this revenue procedure.

.14 PRENOTIFICATION A C H DEBIT. “Prenotification ACH debit” is a process whereby the appropriate Financial Agent originates a zero dollar entry to the taxpayer’s financial institution to verify the RTN of the taxpayer’s financial institution, the taxpayer’s account number, and the account type. See section 4.03 of this revenue procedure.

.15 TA X PAYER IDENTIFICAT I O N NUMBER (TIN). A “TIN” is a taxpayer identifying number assigned to a taxpayer for the purpose of reporting tax related information. ATIN includes an EIN, ITIN, or SSN.