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Effort Drives Taxpayers to the Phone

Official Payments Corp. this week launched the national print segment of a $5 million direct response ad campaign encouraging consumers to pay their 1999 federal income taxes with a credit card.

The New York company, which provides interactive voice-response services, expects that a concentrated amount of ad spending in a short time frame, combined with simultaneous promotional support from the Internal Revenue Service and credit card issuers, will drive people to the phones in record numbers to pay their taxes.

Official Payments, formerly known as U.S. Audiotex, operates a toll-free number, 1-888-2-Pay-Tax, that rings into a call center in San Ramon, CA. Spokesman Bruce Zanca declined to reveal the number of agents the center employs or the capacity of the facility, but he noted that most of the calls are processed without the assistance of live agents.

The phone number was distributed in 140 million 1040 tax forms this year. In addition, the IRS is promoting the number in its own advertising. Credit card companies eager to partner with an IRS-sanctioned acceptor of plastic payments also have joined in the promotion. Some issuers are distributing the toll-free number in their billing statements, Zanca said, and others are encouraging the use of the number through recorded hold messages.

The company’s own print campaign, with ads in The Wall Street Journal and USA Today, highlights the potential benefits of paying taxes with a credit card, such as accumulating frequent-flyer miles or participating in other loyalty programs offered by credit card issuers. The print ads, which were developed inhouse, display the toll-free number and direct consumers to the company’s Web site, www.officialpayments.com. In addition to the print ads, the company is in the middle of a seven-week national radio campaign and is airing radio spots in states that accept credit card payments for taxes.

The company tested a pilot program of the interactive voice-response system last year and collected $174 million through 44,840 transactions for the IRS. This year, its phone-based credit card transactions are up more than 330 percent over last year’s levels at this point.

Official Payments collects a fee based on a sliding scale. It charges $35 on a $1,000 tax payment, for example, but a smaller percentage of much larger tax payments. When customers enter the amount of tax they wish to charge to their credit card on their telephone keypad, a recorded voice informs them of the fee. The entire transaction takes three to four minutes, Zanca said.

Although the company has information about paying by phone on its Web site, it does not yet collect taxes through the Web. Last week, the company sealed a one-year pact to collect tax payments online in 2001.

Official Payments also has agreements with several state governments – including California, Connecticut, Illinois, New Jersey, Minnesota and Oklahoma – as well as the District of Columbia and more than 450 municipal and county entities to collect property taxes, real estate taxes, traffic fines and other government fees by credit card over the Internet and the telephone.

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