Monthly Archives: September 2014

A federal grand jury in Florida recently indicted a woman operating a permitting and licensing business for fraud. She used a counterfeit IRS stamp to make her documentation look official. Meanwhile, she pocketed $248,000 from hard-working truckers. It’s hard to escape every con artist who may come your way. Most of us want to trust those we encounter and especially those we have chosen to do business with. When dealing with the IRS, it’s always best to remain above reproach. 

What are some ways you can protect yourself?

Work With a Reputable Broker or Third Party Company

It seems obvious that you’d want to do this, but even for obvious instances we sometimes need to remind ourselves to check out or business partner. Contact the Better Business Bureau, your local Chamber of Commerce, the local Department of Transportation, etc. Make sure the firm you are dealing with has good ratings and is approved to provide the services they are selling you.

Confirm Your e-File Provider is IRS-Approved

If you e-File Form 2290 yourself, you can easily verify that the IRS approves the site you use. The IRS publishes a list of approved heavy vehicle use tax providers. Each company on the list goes through a process to determine that they are capable of delivering your vehicle tax information to the IRS and of returning your stamped Schedule 1 to you electronically. The IRS updates their list regularly.

Look for the Logo for e-File Providers

The “Authorized IRS e-File Provider” logo will appear on any site that claims they are an approved e-Filer. Cross-check the name of the company with the IRS list above to confirm. Sites using the authorized logo and appearing on the list are safe to use.

Make Tax Payments Only to the Government

The IRS accepts payment via check, ACH, or EFTPS (electronic federal tax payment system). For check payments, make the check payable to the “Department of Treasury” and include the EIN and tax form 2290 in the Memo section. You can make payment directly to the Department of the Treasury no matter how you file your 2290: online via e-File, at a broker’s office, or in person at an IRS office. When mailing a check payment, you do not expose your financial information to any third parties. E-File providers often offer ACH payments that you can have debited directly from your checking account. The third option is the EFTPS. To use that service, you must register in advance on the EFTPS website or pre-enroll when setting up your EIN. Registering on the EFTPS site means they will mail a PIN to you, which could take 5-7 business days to arrive. Keep that in mind when planning your payments. No matter how you pay the government, never pay your tax to the third-party directly via check or cash. Always pay the tax to the Department of the Treasury.

Ask Questions

Most HVUT providers offer support in person or via email, chat, phone, or some combination of those methods. Contact them and ask about their experience in dealing with the IRS. Ask how long it will take to get your stamped or watermarked copy of the Schedule 1 and what it will look like. Talk to them about anything relating to filing your 2290; they should be able to provide good answers.

Security

Cloud-based providers offer unmatched security. Your data sits behind firewalls, on servers guarded 24/7/365 (at least, that is how we do it). You can access it when you want, giving you a convenient way to store your records; hackers can’t access it, giving you peace of mind. If you deal directly with a broker at their office, make sure their security is good, too. They should shred any paper that they dispose of that contains personally identifiable information. A “clean-desk” policy is a good thing – no paperwork with personal information should be left lying in plain view. All paperwork should be locked away at the end of the day. Video surveillance after hours helps security as well.

Bottom Line

While there are many reputable brokers and permit companies, others are not as scrupulous. The indicted woman proves that. Her clients now have to find out what their legal exposure is. Take some steps to protect yourself and avoid that problem. Remember per IRS, a taxpayer is ultimately responsible for the timely payment of tax dues.

The due date for filing your 2290 to pay your excise tax is August 31 each year. For 2014, the deadline is actually September 2, since August 31 falls on a weekend. What happens if you fail to pay the tax when due?

The Penalties Can Be Steep
Not surprisingly, the IRS will penalize any owner who fails to file their 2290 in a timely manner. The amount of penalty is 4.5% of the tax due. They assess that penalty on a monthly basis for up to five months.

That’s just the start, though. If you don’t file on time, and you fail to pay the tax due, there is an additional penalty of 0.5% of the total tax due. Interest charges accrue for each month the payment is late as well. Those interest charges equal another 0.54% per month.

Here is an example. You owe $550 for your heavy road use tax. You fail to file and you fail to pay the tax due for five months. The penalties would add up to $123.75 for the 4.5% failure to file, plus $13.75 for the 0.5% late payment penalty. Interest would add more than $3 per month at the rate of 0.54% per month on the balance due each month. In other words, you’re looking at a total due of over $700 for failing to file and pay your tax in a timely manner.

To look at it another way, you’d pay an amount over 27% higher than the original tax that was due. And to remain on the road, you’re going to wind up paying the tax eventually anyway.

But wait, there’s more…
Those penalties and interest are on a federal tax payment. You may also find that your state suspends the vehicle registration. If you subsequently are stopped by law enforcement, you’d face a ticket and fine. That could add a substantial amount to the penalties and interest mentioned above.

What to Do
File your 2290  and pay your tax! No one likes paying taxes, but it is a cost of doing business. To minimize the amount you pay, file by September 2, 2014. The fastest and easiest way to remain in compliance is to e-File your 2290 online. You can pay for the filing on your credit card and pay your taxes via EFTPS, ACH bank draft, or by mailing a check to the IRS. Either way you pay, make sure you have beaten the deadline.

Bottom Line
Don’t risk the possibility of losing your vehicle registration or facing additional fines and penalties. Use our e-File service to remain in compliance and stay on the road.