A definition of Fax over IP:
Transmission of a facsimile over an IP network instead of PSTN, analogous to Voice over IP. Fax over IP is also called Web Fax Services, Internet Fax Services, or IP Fax.

Fax over IP
Fax over IP is the routing of fax messages (partially) over the internet while integration with your existing IP based infrastructure and PABX. Fax over IP is an alternative that organizations are exploring as the T.38 IP fax protocol is already builtin in several IP routers such as Cisco, 3Com, Alcatel, etc.
Fax over IP allows enterprises to leverage IP networks for transmitting documents over secure and boardless fax servers. Faxes can be sent from the desktop where the content travels in a digital form till it reaches the PSTN endpoint gateway. Fax over IP integrates well with existing applications and works with multi-function devices.

Next steps
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More information on Fax over IP
For more information on Fax over IP follow one of these links, they provide good additional information:
http://www.webopedia.com/TERM/I/IP_faxing.html
http://www.cantata.com/applications/fax/faxoverip/index.cfm
http://www.eicon.com/worldwide/solutions/FoIP_reduceExpenditure.htm

Fenestrae Fax over IP Solutions