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TIP, PATAX Applications to Replace TT&L

Beginning mid-year 2000 two new systems, Treasury Investment Program (TIP) and PATAX, will replace the current Treasury Tax and Loan (TT&L) system. Several changes in recent years have impacted the TT&L application, and the creation of electronic tax payment mechanisms have introduced new business requirements for TT&L.

Newly automated business functions have placed additional data requirements on TT&L, and centralized processing has become the focus in application development. Because the current TT&L system is limited in its ability to accommodate continued, expanded functionality, the design of a new application became necessary. The new TIP and PATAX systems will address changes in payment mechanisms, incorporate changes in the data processing environment and improve data reporting to the Treasury.

During the transition to an all-electronic environment in the mid-nineties, the Treasury implemented the Electronic Federal Tax Payment System (EFTPS), which allowed financial institutions to report their customers' tax payments electronically as an alternative to using federal tax deposit (FTD) coupons. Envisioning an all-electronic environment, the initial TIP design did not include FTD processing. PATAX was designed to process paper-based tax deposits, in addition to electronic payments, when legislation was passed allowing small businesses to continue using FTDs.

The TIP system, developed by the St. Louis Fed, will receive summarized tax deposit information from EFTPS and PATAX. The information will be stored by TIP and used to provide real-time balances and capacity data to the Treasury. This will assist the Treasury in its daily projections of funds needed to maintain the Treasury's working balance. From these projections, the Treasury will decide whether to invest or withdraw funds from the participating financial institution accounts. In addition, TIP will redesign the current TT&L investment and withdrawal options and classifications available to financial institutions. It will also provide collateral monitoring for the Treasury Circular 176 collateral program.

Stay tuned for more detailed information on TIP and PATAX in the coming months.