Introduction

In response to Executive Order 14247, “Modernizing Payments to and From America’s Bank Account,” the IRS is making a swift transition away from sending or receiving paper checks. For the most part, the IRS will stop issuing tax refunds in the form of paper checks after September 30, 2025. Going forward, it also will take steps to begin requiring that taxpayers make all payments to the IRS electronically.  

As explained in this National Taxpayer Advocate blog, the IRS will begin implementing the EO for 2025 tax returns. For the 2024 and prior tax returns, there will be no change in how taxpayers receive payments from or make payments to the IRS. For 2025 returns, taxpayers will be asked to provide the IRS with their direct deposit information or demonstrate that they qualify for an exception. (If a taxpayer does not provide direct deposit information, the IRS will issue a paper check after six weeks.)  

There are some groups, such as taxpayers who are unbanked, live abroad, or have deeply held religious beliefs, who may find this transition difficult. There are steps some taxpayers can take to prepare for this transition. One step some taxpayers can take is familiarizing themselves with the options the IRS provides taxpayers for both receiving and making electronic payments.  In addition, the IRS is considering limited exceptions where electronic payment and collection methods are not feasible. 

Receiving Tax Refunds Electronically

IRS payment of tax refunds via direct deposit is by far the safest and fastest way for taxpayers to receive their refunds. There are several ways for taxpayers to have the IRS deposit their tax refunds, including:  

• Into a checking, savings or retirement account: Taxpayers must include their checking, savings, mutual fund or IRA account number, and the institution’s routing number on their return to enable the IRS to direct deposit their tax refund into the appropriate account. In cases where the taxpayer wants the refund deposited into a retirement account, they are responsible for informing the IRA trustee.  
• Onto a prepaid debit card: Taxpayers may choose to have their refund direct deposited onto a prepaid debit card. Taxpayers will need to check with the issuing financial institution, but generally speaking, reloadable prepaid cards have account and routing numbers that taxpayers can share with the IRS.  
• Onto a mobile app: Taxpayers may be able to use one of their mobile apps. The mobile app must have routing and account numbers that taxpayers can enter on a tax return. Taxpayers should check with the mobile app provider or financial institution to confirm which numbers to use. 

Taxpayers Can Have Their Tax Refund Split Among Several Accounts 

Taxpayers can elect to have a portion of their refund direct deposited into up to three accounts by completing IRS Form 8888, Allocation of Refund, and submitting it with their tax return. Most tax preparation software also provides this option.  

Paying a Tax Bill Electronically

There are a number of ways taxpayers – both individuals and businesses – can pay their taxes through electronic means, including:  

• Paying directly from a bank account: Taxpayers can pay at the time they submit their return or schedule payments up to a year in advance. Individual and business taxpayers can also use IRS Direct Pay to pay taxes from their bank account. Direct Pay is free and secure, doesn’t require a sign-in, and you can change or cancel within two days of a scheduled payment. 
• Using a debit card, credit card, or digital wallet: Both individual and business taxpayers can use one of these methods to pay their tax bill. However, taxpayers should be aware the card or wallet may charge a processing fee, and this option is not available for paying payroll taxes.  
• Paying from an individual or business IRS account: Taxpayers who have an online account with the IRS can make payments through this account for an amount owed, a quarterly estimated tax payment, a payment on a recently filed amended return, a proposed tax assessment, a payment for an extension to file an income tax return (available January – April), an offer in compromise (OIC) application fee, or other OIC related payment. 
• Via the Electronic Federal Tax Payment System (EFTPS): Taxpayers must enroll in EFTPS to make payments through this system. Taxpayers can use EFTPS to make payments from their bank accounts.  

What Taxpayers Should Consider as Treasury and IRS Implement the Executive Order

Some taxpayers may encounter challenges to using the available electronic payment options. These barriers may be relatively easy to overcome by tapping into a number of available resources, but some taxpayers may find them insurmountable, requiring that they apply for an exception to the executive order mandate. Below are some options and resources taxpayers may consider:  

1. Banking Options for the Unbanked 
   • Unbanked individuals can find a variety of low-cost and no-cost banking options at FDIC.Gov/GetBanked.  
   • Recipients of Veterans Administration monetary benefits can get assistance with their banking questions at Veterans Benefits Banking Program (VBBP).  
2. Taxpayers Living Abroad 
   • U.S. citizens living overseas should explore international banking options that can accept U.S. government electronic payments. 
   • If your bank cannot receive U.S. Treasury deposits, you may need to work with a tax professional or contact the IRS for assistance. 
3. Religious or Legal Concerns  
   • At this time, the IRS has not released guidance advising taxpayers about how they can apply for an exception to the Executive Order mandate, but such IRS guidance should be forthcoming.  

Refunds: Don’t Wait Until It’s Too Late

Modernizing how refunds are issued presents a major shift in how millions of Americans interact with the IRS. Don’t let your refund get lost in the transition! 

Now is the time to start preparing: 

✅ Review direct deposit options;
✅ Include direct deposit information on filed returns and double-check the numbers for accuracy; and
✅ Spread the word to friends, family, and clients who may be unaware of this change. 

The Taxpayer Advocate Service will continue to provide updates, guidance, and advocacy to ensure taxpayers are kept informed as Treasury and the IRS implement this change. 

Resources

• National Taxpayer Advocate Blog: As the IRS Phases Out Paper Checks, Vulnerable Taxpayers Must Not Be Left Behind 
• IRS to phase out paper tax refund checks starting with individual taxpayers 
• IRS.Gov, Refund inquiries 12 | Internal Revenue Service 
• IRS.Gov, Get your refund faster: Tell IRS to direct deposit your refund to one, two, or three accounts | Internal Revenue Service 
• FDIC.gov/GetBanked 
• Veterans Benefits Banking Program (VBBP) 
• Online account for individuals – Frequently asked questions | Internal Revenue Service 
• EFTPS: The Electronic Federal Tax Payment System | Internal Revenue Service 
• IRS.Gov, Direct Pay