The Internal Revenue Service has announced a pilot program to let some 890,000 businesses file quarterly payroll tax returns by telephone.

The new program, available mostly to small- and medium-sized businesses in 14 Southeastern states, allows companies to file Form 941 by telephone. This form accounts for the Social Security, Medicare and income taxes employers withhold from workers' paychecks.

The IRS said the new system is like the TeleFile program for individual tax returns that enables individuals to file simple tax returns by a touch-tone phone. Like the TeleFile project, the IRS selects the business taxpayers eligible to file over telephone and will send a special package describing the program to the potential filers in the next few weeks.

The Form 941 pilot project will begin for returns due April 30.

The free, paperless telephone filing method will eventually be available nationwide for employment taxes, the IRS said.