In March 2025, Executive Order 14247 was signed, directing federal agencies, including the IRS, to significantly modernize and digitize their payment and processing systems. Executive Order 14247 states that the Treasury must stop issuing paper checks effective September 30, 2025, to the extent permitted by law. It also requires federal agencies, like the IRS, to modernize incoming payments using electronic options.
For taxpayers, this signals a major operational shift: the IRS is moving toward a fully electronic environment for tax payments and refunds. The direction is clear – paper checks are being phased out.
What Is Changing?
The primary goals of Executive Order 14247 include:
- Reducing reliance on paper checks
- Increasing electronic payments and refunds
- Improving fraud prevention and payment tracking
- Streamlining IRS processing systems
In practical terms, taxpayers should expect:
- Fewer paper refund checks
- Greater emphasis on direct deposit
- Expanded use of electronic payment methods
- Potential delays or complications for paper-based transactions
Why This Matters to You
Many taxpayers still prefer receiving paper refund checks or are hesitant to provide bank account information on their tax returns. We understand those concerns.
However, as the IRS transitions to a digital-first system:
- Paper refund processing may take significantly longer.
- Many transactions will eventually require electronic payment.
- Manual processing increases the likelihood of delays or lost payments.
- Fraud prevention systems are more robust with electronic transfers than paper checks.
- The federal tax system is moving to fully electronic.
Refunds and Disbursements
The IRS has confirmed that for tax returns filed after September 30, 2025, electronic refund delivery will be the default method of payment.
While providing banking information for direct deposit remains technically voluntary, failing to do so may significantly delay the issuance of refunds.
If bank account information is not included with a filed return:
- The return will still be accepted and processed.
- The IRS will issue a written request asking the taxpayer to provide or update direct deposit information.
- A CP53E Notice will be mailed, requesting a response within 30 days, either to provide banking details or to explain why electronic information cannot be furnished.
- If no response is received and there are no other issues with the return, the refund will ultimately be issued as a paper check. However, this process may delay receipt of funds by six weeks or more.
Given these additional steps and potential delays, we strongly encourage clients to provide direct deposit information whenever possible to ensure the most efficient processing of refunds.
Payments to the IRS
Executive Order 14247 also applies to payments made to the IRS.
At this time, the IRS continues to accept mailed payments, including checks, money orders, and cash submitted through authorized channels. However, the long-term direction is clear: the agency is transitioning toward a fully electronic payment environment.
The IRS is actively expanding its digital payment infrastructure to make electronic payment options more accessible, secure, and efficient. Over time, taxpayers should expect increased emphasis on electronic withdrawals, online payments, and other digital methods, with paper-based payments becoming less common.
To avoid processing delays and ensure timely confirmation of payment, we recommend utilizing electronic payment options whenever possible.
Impact on Businesses
Beginning with the initial phase of implementation after September 30, 2025, the Internal Revenue Service will expand direct deposit availability to most business tax return types. Over time, paper check refunds for businesses are expected to be phased out as electronic delivery becomes the standard method.
In addition, the IRS is enhancing its digital payment infrastructure to better accommodate business needs. Expanded electronic payment options will make it easier for businesses, trustees, and fiduciaries to submit large or bulk payments securely and efficiently.
As these changes take effect, businesses should plan to incorporate electronic refund and payment methods into their standard tax compliance processes to avoid potential delays and administrative complications.
Is Providing Bank Information Safe?
A common concern is security. In reality:
- Direct deposit reduces fraud risk compared to mailed paper checks.
- Funds are transferred securely and directly to your account.
- There is no risk of lost, stolen, or intercepted checks.
- Electronic confirmation of payment is immediate.
From a compliance and efficiency standpoint, electronic processing is now the safest and fastest method available.
Our Recommendation
We strongly recommend that clients:
- Provide direct deposit information for refunds.
- Use electronic withdrawal for balances due.
- Maintain updated banking information with our office.
- Consider IRS online account access for payment tracking.
As your advisors, our goal is to ensure your returns are processed as smoothly and efficiently as possible. The IRS is moving toward a fully electronic system and adapting now will help avoid unnecessary delays later.
We understand that the evolving payment landscape can feel confusing. For example, a common question we receive is, “Can I pay my taxes with a debit or credit card?” The answer is yes – both options are currently available through the Internal Revenue Service’s approved electronic payment platforms.
The IRS already offers a variety of secure electronic payment methods and is expected to continue expanding digital options as part of its modernization efforts. As these changes develop, our team will closely monitor new guidance and provide timely updates to help you navigate the transition with confidence.
