IRS Modernizes Payments by Transitioning to Fully Electronic Methods 

The Executive Order 14247, signed March 25, 2025, directs the U.S. Department of the Treasury and the Internal Revenue Service to transition federal payments to fully electronic methods. The goal is to reduce fraud, increase efficiency, lower costs, and improve payment security.

Key Changes for Individual Taxpayers

• Paper refund checks largely phased out after September 30, 2025. Most refunds are now issued electronically via direct deposit or other secure digital methods.
• No change to tax return filing procedures. Taxpayers will continue to file as usual.
• Taxpayers without bank accounts will have alternative electronic options available, including certain prepaid debit cards and mobile payment solutions. Limited exceptions for paper checks will remain in hardship or legally required situations.
• If direct deposit information is not provided, the IRS will contact taxpayers by mail to request updated banking details before issuing a refund.
• The IRS will not request banking information by phone or text.

Electronic refunds are generally faster and more secure than paper checks.

Payments to the IRS

The Executive Order also applies to payments made to the IRS.

• While checks and money orders are still accepted for now, the IRS is encouraging taxpayers to use electronic payment options such as Direct Pay, debit/credit cards, online accounts, and EFTPS.
• Beginning October 17, 2025, individuals can no longer newly enroll in EFTPS, and all individuals will transition away from EFTPS in 2026.
• Electronic payments provide immediate confirmation and faster processing.
• Federal Tax Deposits must continue to be made electronically.

Businesses and Third Parties

• The IRS is expanding direct deposit options for business refunds.
• Businesses, trustees, payroll providers, and other third parties will be expected to use electronic payment methods as options expand.
• Bulk and batch payment tools, including EFTPS Batch Provider, remain available.
• Paper checks will continue to be accepted in limited hardship or procedural situations.

International Taxpayers

Wire transfers remain available, and the IRS is developing additional cross-border electronic payment solutions to improve refund delivery and payment processing abroad.

Overall, Executive Order 14247 represents a significant shift toward faster, more secure electronic transactions between taxpayers and the federal government. Taxpayers should ensure their banking information is current and monitor IRS guidance as the transition continues. For a more detailed Q&A from the IRS, see below and reach out to your tax professional with any questions.