On January 27, 2026, the IRS issued FAQs to explain the impact of Executive Order 14247 on taxpayers in 2026 and beyond. The President signed Modernizing Payments To and From America’s Bank Account on March 25, 2025. It directed the Treasury, in coordination with the IRS, to transition to fully electronic federal payments both by and to the IRS. The transition is intended to enhance security, increase efficiency, and reduce costs. The Order covers:
- Payments made by the federal government (tax refunds, benefits, grants vendor/contractor payments), and
- Payments to the federal government (tax balances due, fees, penalties, and other remittances from individuals, businesses, nonprofits, and state/local partners).
The IRS started phasing out paper tax refund checks and other non-electronic disbursements on Sept. 30, 2025. Tax filings have not changed. The Executive Order addressed only payments and disbursements.
The recent FAQs provide more detail on the implementation of this Order, including the general timeline for implementing the changes.
Impacts for Individual Taxpayers
Payments by Treasury (Refunds)
The Order required Treasury to stop issuing paper checks effective Sept. 30, 2025, to the extent permitted by law. The FAQ states that the Treasury will continue to issue certified payments and paper checks in limited circumstances. However, IRS generally stopped issuing paper refund checks to individual taxpayers beginning October 1, 2025.
The FAQ states that alternative methods to disburse refunds will be provided to individuals without traditional banking services Specifically, payments via certain mobile apps and prepaid debit cards will be used. In limited cases, paper checks may be issued.
The FAQ directs taxpayers to do the following:
- Ensure their direct deposit information is up to date when filing their tax return.
- Consider opening a low- or no-cost bank or credit union account if they don’t currently have one.
- Monitor IRS.gov for updates on alternative electronic payment options and exception processes for those who cannot receive funds electronically.
Although the FAQ states that new procedures are intended to minimize delays, taxpayers who do not provide bank account information will see their refunds delayed.
The IRS will send letters to all individuals with missing bank information, asking them to update their banking information. The taxpayer will then receive a CP53E notice requesting a response within 30 days, either to provide banking information or to explain why such information cannot be provided. The taxpayer can use the IRS Individual Online Account to provide the missing information. IRS employees cannot take direct deposit information over the phone or in person.
Once the taxpayer provides the information, the refund will be immediately released via direct deposit or paper check. If there is no response to the notice and there are no other issues with the tax return, the refund will be released as a paper check after six weeks.
The IRS will not contact taxpayers by phone or text to request banking information. If a taxpayer receives such a text or phone call, it is a scam.
The FAQs state that no changes have yet been made to the way refunds are issued to decedent accounts. Paper checks will continue to be sent until further notice.
Payments to the Treasury
Although the Order applies to payments made to the Treasury, the IRS continues to accept checks and money orders for now. However, “the IRS strongly encourages taxpayers to make payments using existing electronic options.” The FAQ states that over time, the ability to send paper checks will be reduced, with exceptions made only for situations like hardship and legal or procedural requirements. The notice did not provide an official end date for their acceptance of paper checks, but it appears individual taxpayers can safely send paper checks through the 2026 filing season.
IRS states that it is expanding its digital payment systems to make electronic payments easier. Options include:
- debit/credit card or digital wallet
- IRS Direct Pay (direct from a bank account with no fee)
- IRS Individual Online Account
- IRS Business Tax Account
- Electronic Federal Tax Payment System (EFTPS).
- EFTPS payment options will end for individual taxpayers in late 2026. Effective Oct. 17, 2025, individuals are no longer able to create new enrollments via EFTPS.gov.
Processing fees may apply to some transactions. Some limits apply to some types of payments.
Business Payments and Disbursements
Businesses cannot use cash or card payments to make federal tax deposits. Instead, they must use their business tax account, Direct Pay for businesses, or the Electronic Federal Tax Payment System (EFTPS). Deposits not made electronically may be subject to a penalty unless the taxpayer can establish reasonable cause for why they aren’t able to pay electronically.
The IRS has added the direct deposit option to most business tax return types to allow businesses to receive their refunds through electronic deposit. Over time, paper check refunds to businesses will also be phased out.
The IRS says that it will expand digital payment options to allow businesses, trustees, and fiduciaries to handle bulk or large payments securely. Additional guidance will be issued as updated applications become available.
Options for Third Parties
Like others, third parties, such as payroll service providers, who transact with the IRS on behalf of others, will be expected to use electronic payment methods made available to them. The EFTPS Batch Provider tool, available at www.eftps.gov, can be used by some third parties, including tax professionals, who wish to make multiple federal tax payments on behalf of their clients.
The IRS states that it will provide training resources, webinars, and FAQs tailored to the specific needs of third parties.
The IRS also says that it will accept checks when electronic payment methods are not available for a certain transaction type or in specific situations such as those involving hardships and/or legal and procedural requirements.
The FAQ states that tax practitioners can use electronic payment methods such as EFTPS or Electronic Funds Withdrawal to make payments on behalf of clients without violating Circular 230. They are reminded, however, to encourage clients to pay with their own electronic methods.