Federal Liaison Services Introduces Industry's First Web-Based Payroll Tax System

eDP.COMpliance® Provides New Options for Tax Compliance Insourcing and Outsourcing

LAS VEGAS, NEVADA - 5/18/99 - Federal Liaison Services, Inc. (FLS) today announced its new Web-based payroll tax compliance system, Employers Direct Pay.COMpliance™ (eDP.COMpliance®), the first browser-based application for the tax reporting market. The software allows businesses to comply with the thousands of payroll tax regulations imposed by more than 100 federal and state, and nearly 7,000 local government agencies.

By automating the payroll tax compliance process, employers can minimize the risk of penalties assessed by government agencies, which can reach upwards of 10% of an individual payroll deposit, or more with interest. Companies can also reduce the resources required for what is an otherwise labor-intensive, repetitive task, and refocus payroll and tax personnel on more productive corporate goals.

eDP.COMpliance® delivers comprehensive compliance services online to mid-sized and small businesses, as well as to FLS' current Fortune 1000 customers. The software automates the tasks associated with payroll tax compliance, and includes features to handle federal, state and local tax deposit calendars, cash management, electronic tax payments, and multiple reporting sites.

The inherent browser-based architecture allows customers to choose an implementation strategy that best fits their needs. The application can be deployed via the Internet, or on a corporate intranet or extranet. All payroll tax compliance processes can be decentralized, so multiple users can access the same database in real time from any PC that supports a browser.

"Companies large and small are turning to Web-based solutions for their enterprise-wide business problems," said Fran Bartlett, president and CEO of Federal Liaison Services. "eDP.COMpliance® introduces an affordable, scalable solution that's easy to learn and use, and maintains our history of delivering the best compliance solutions on the market. Our aim is to provide the ultimate amount of control to users with the least amount of effort on their part. The Internet makes that possible, blurring the line between insourcing and outsourcing that was once so distinct."

The U.S. Department of the Treasury began using the FLS Web-based software in July 1998. The new FEDTAX II system handles about $40 billion of the Treasury's $1.5 trillion in annual collections. More than 300 federal agencies now make payroll tax payments electronically using the FLS system. FLS has utilized the knowledge gained from supporting the tax needs of the federal government to create the commercial version of eDP.COMpliance.

Plans call for the new application to be rolled out in two separate phases. In the first phase, scheduled for third quarter of 1999, existing customers of FLS Compliance Outsourcing Services™ will have their tax compliance processes converted over to eDP.COMpliance. These 200+ businesses, which currently outsource their payroll tax tasks to FLS, will benefit from the new functionality, efficiency and reporting options of the software. The web-based architecture of eDP.COMpliance will enable these customers to access their tax data online via the Internet, in order to make changes, verify tax payment status, obtain reports and directly control various parts of the compliance process.

In phase two, scheduled for early 2000, the software solution will be made available to customers who wish to handle payroll tax compliance internally. Using eDP.COMpliance® as a stand-alone software product, businesses of any size can implement the solution on their own hardware and pay for only the level of compliance they need. They will also have the ability to deploy the software via the Internet in a secure, decentralized fashion, or run it locally on a single PC.

eDP.COMpliance® interfaces with most major ERP/payroll applications, and can export data to accounts payable, treasury or general ledger systems. The application also links to FLS EPIC™ (Electronic Payment and Information Courier) services to automatically format and transmit electronic tax payments.

Fully Y2K-compliant, eDP.COMpliance® reinforces FLS as the leader and authority in payroll tax compliance. The system provides companies of any size with a wide range of options in automating tax processing. Businesses can choose to insource or outsource their compliance needs, or can choose to combine the two options by outsourcing a portion of the processing to FLS while maintaining the remainder themselves.

About Federal Liaison Services, Inc. (FLS)

FLS is the leading provider of software solutions and services to employers for government reporting and compliance. FLS solutions automate payroll tax payments and filings, wage garnishment processing, and year-end W-2 and 1099 processing. Applications are Web- and client/server-based, and are scalable to enterprises of all sizes. FLS clients include nearly 400 of the Fortune 1000, as well as major government agencies. Visit FLS online at www.flsinc.com or call 972/239-8881; fax 972/239-9540. The company's headquarters are located at 12001 N. Central Expressway, Suite 700, Dallas, TX 75243-3729.