3.2    Electronic Fund Transfer (EFT) Compliance Overview

[ 3.2.1   EFT - Initial Notification][3.2.2   EFT - Initial Notification Strike List][3.2.3   EFT - Compliance ][ 3.2.4   EFT - Compliance Penalties]

Rule §815.109(d). "" Payment of Contributions and Reimbursements: "An employer or other entity, including agents paying on behalf of multiple employers, which paid contributions in the preceding state fiscal year of $250,000 or more, and which is reasonably anticipated to do the same in the current fiscal year, is required to transfer payment amounts of contributions by electronic funds transfer on or before the date the contributions are due, unless the Agency in writing has approved another method or form of payment…""

3.2.1    EFT - Initial Notification

Each year during the month of September, the Controller will provide Tax a list of all accounts with $250,000.00 or more in paid taxes for that year. The list will be annotated to show which accounts are new liable employers and which of those new liable employers are already filing by EFT. The Controller's cover letter will indicate when the Controller will mail out the initial notification letters and will identify the first quarter when these accounts must submit their electronic payment using TEXNET.

The Controller's letter to Tax requests that Tax review the indicated accounts on the list for reasons why the notification letters should not be sent. If an account should not receive the initial notification letter, the account should go on the strike list.

3.2.2    EFT - Initial Notification Strike List

In the main frame system,
Go to the Tax Functions area and press enter -the Tax Function Menu will appear.
Select number 7 (TQT) Quarterly Tax and press enter - the Quarterly Tax Reporting Menu will appear.
Select number 11 (QEF) EFT Flag and press enter - the ET Flag screen will appear
Enter the account number under the heading EID,
Tab over to the heading "Required EFT Payer"
Enter an "N" or "Y".

3.2.3    EFT - Compliance

The Controller will notify Tax quarterly when accounts do not comply with EFT criteria. This list consists of accounts that are and are not registered with the State Comptroller.

Tax will review each account for compliance.
The list will be separated into those accounts that are registered with the State Comptroller and those that are not.
Accounts needing action will be assigned out for processing
The assigned accounts examiner will:
Review the list to determine the method in which the account paid in the past.
Special note will be taken of those accounts that are new to the list and those accounts that are repeat violators.
Send non-compliant letter " EFT Not Registered" with a TEXNET Enrollment Form, to the address of record, for those accounts that are not registered.
Send non-compliant letter "EFT Registered" to those accounts that are registered with the Comptroller, but are not complying.
Call the employer to discuss compliance ten days after the letter is mailed.
Annotate employer's response on the comment screen (FTC) including the contact's name, position and a brief description of the response.
Refer employer to Controller for assistance in becoming compliant if necessary.
Maintain the listing and copy of the letters sent in master file for one year active and one year inactive.

3.2.4    EFT Compliance Penalties

Employer failure to comply with the EFT Rule may invoke penalties as prescribed in 213.024 and 213.025. In brief, these state, "an employing unit shall pay a penalty of $30.00 for each consecutive day that a violation…continues after notice is given… " Also, " The penalty is imposed and becomes cumulative on the 10th day after the date written notice is given or mailed to the employing unit…"

Due to the time between the first notification and the next failure to comply with this rule, it is very important to maintain accurate records both on the FTC screen and the external hard copy of the notification letter. This accuracy is required to provide justification to the Tax Department Director to authorize sending the letter imposing the penalties. Upon receipt of a next Non-Complying Employer list, review the listing for second or more time violators, and determine with management if the penalty letter will be sent.

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