Consumer Payment Card News

Uncle Sam Goes Plastic

As of January 15, 1999, taxpayers can pay their 1998 federal income tax with their credit card. In 1997 Congress passed the Taxpayer Relief Act, granting the IRS authority to accept credit-card payments for federal income tax. The Internal Revenue Service then undertook a comprehensive vendor-evaluation process, leading to the awarding of a credit card processing agreement with U S Audiotex, an affiliate of Imperial Bancorp.
This new arrangement will couple the convenience and flexibility that are inherent with credit card transaction, with the ease and accessibility of calling in your tax return. Taxpayers, using a touch-tone phone, dial 888/2PAY-TAX and are connected to the U S Audiotex Interactive Voice Response (IVR) system. The computer system then prompts the taxpayer (using the numeric keys on the touch-tone phone) to select Federal Income Tax. The system then prompts for information including Social Security number and amount of payment. The taxpayer is then informed of the amount of the convenience fee charged by U S Audiotex, and is instructed to enter their credit card number and expiration date.

The IVR system performs an online authorization to verify credit, then provides the caller with a confirmation number that the payment has been authorized by the credit card issuer. Social Security number and payment data are transmitted directly to the IRS, and funds are electronically transferred to the IRS financial agent. Taxpayer credit card information is not forwarded to the IRS.

The Taxpayer Relief Act of 1997 precludes the IRS from incurring any costs associated with the acceptance of credit cards for the payment of federal income tax. Consequently, U S Audiotex covers the fees traditionally associated with merchant acceptance of credit cards.

The primary goals of the new IRS program are to drastically cut-down on paper-based payment methods, and to make it easier and more attractive for taxpayers to file electronically by offering an electronic payment option.

If this new payment system seems just right for you, file your tax return by calling 888/2PAY-TAX. If youd like more information about U S Audiotex and the IRS credit card acceptance program, visit the Web site or

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