Magazine article American Banker

Wells Adds Tax PaymentOn Customer's Timetable to PC Banking Program

Magazine article American Banker

Wells Adds Tax PaymentOn Customer's Timetable to PC Banking Program

Article excerpt

Wells Fargo & Co. has introduced a service that lets small businesses pay federal taxes using its PC banking program.

The service, launched last week, transfers funds to the Internal Revenue Service using automated clearing house credit transactions. The account holder can initiate a transaction as late as 3 p.m. the day before tax is due.

In 1993 the IRS declared that larger small businesses-those that would owe more than $50,000 in taxes for 1996-would have to start paying electronically as of June 30, 1998. That date was later extended to next Jan. 1.

Such businesses will face a 10% penalty if they pay by check. Those with less tax liability are not required to file electronically but can do so if they want to.

The Wells program is unusual in using credit transactions initiated by the taxpayer; most such programs involve debit transactions, authorized in advance but initiated by the IRS.

Stephen Belford, a Wells senior vice president, said the credit approach gives business owners more control, since they choose when to pay.

"The cash flow of small businesses tends to be very unpredictable," Mr. Belford said. "This way they have control over their money."

There is no extra charge for the tax service, because it costs Wells less than the ordinary alternatives. Users of the PC banking service pay $14.95 at start-up and $5 a month.

Wells hopes the tax service will build relationships with customers and introduce them to initiating ACH transactions using their PCs, he said. …

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