IRS Releases Frequently Asked Questions (“FAQ”) on Transition to Electronic Payments Under Executive Order 14247

The IRS has published new FAQs explaining how Executive Order 14247, Modernizing Payments To and From America’s Bank Account (the “Order”), will reshape how taxpayers receive refunds and make payments.  The Treasury and IRS began phasing out paper refund checks on September 30, 2025, and will increasingly require electronic payment methods for both outgoing and incoming federal transactions.

The Order was a 2025 directive requiring the U.S. federal government to transition nearly all payments (e.g., Social Security, tax refunds, etc.) from paper checks to electronic transfers.  The Order aims to reduce fraud, theft, delays, and administrative costs by modernizing how money moves into and out of the U.S. Treasury’s General Fund.

FAQs’ Key Highlights

Paper Refund Checks Are Being Phased Out, but Taxpayers Without Bank Accounts Will Still Have Options

• The IRS has largely stopped issuing paper refund checks for individual taxpayers after September 30, 2025, except in limited hardship or legally required situations.
• Filing processes remain unchanged; only payment methods are affected.
• Refunds may be delivered through prepaid debit cards, mobile payment apps, or other electronic alternatives.
• Resources are available to help taxpayers open low‑ or no‑cost bank accounts, to facilitate electronic payments.

Electronic Payments to the IRS Will Become the Default

• At present, the Order does not impact taxpayers’ manual payments to the IRS: checks and money orders are still accepted for now, but the IRS will gradually reduce reliance on paper remittances.
• Current electronic options include Direct Pay, IRS Online Accounts, debit/credit cards, digital wallets, and the electronic federal tax payment system (“EFTPS,” although enrollment for individuals ended October 17, 2025).

Expanded Electronic Options

• Direct deposit will be added to most business return types beginning in 2026.
• Bulk and trustee payment systems will be modernized to support electronic transactions.
• The IRS is developing partnerships with international payment providers to support cross‑border refunds and payments.
• Payroll providers, trustees, and tax professionals will be expected to transition to electronic payment systems as they become available.
• The IRS will provide training, technical resources, and updated guidance.

Takeaway

Executive Order 14247 represents a major shift toward secure, fast, and fully electronic federal payments.  Taxpayers, businesses, and practitioners should begin preparing now for the near‑complete phase‑out of paper checks, and the IRS’s expansion of its digital payment infrastructure.