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IRS Payment Modernization: Sending and Receiving Funds Electronically

Sep 08, 2025 ·

An Executive Order (EO) issued March 25, 2025, requires that paper checks for federal disbursements cease by Sept. 30, 2025 and that payments sent to Treasury (including tax payments) should be processed electronically as soon as practicable to the extent permitted by law.

More information is needed on the details of how and when this will be implemented, but it is important to note that paying tax balances due by check and receiving tax refunds by check may soon become obsolete except for specific exceptions.

This FAQ explains what we know now about what the order means for taxpayers and tax professionals. These will be expanded as more information becomes available.

IRS Payment Modernization: Sending and Receiving Funds Electronically

The order directs the Treasury Secretary to cease issuing paper checks for all federal disbursements, including tax refunds, by Sept. 30, 2025, unless an exception applies for individuals who cannot access banking services or electronic payment systems.

What concerns were raised by the AICPA raised in the June 30, 2025 comment letter?

The following concerns and suggestions were provided to the Dept. of Treasury:

  • Provide clear guidance on how exceptions will be granted and administered

  • Provide transitional relief for trusts, estates and non-U.S. individuals/entities

  • Expand the electronic federal tax payment system (EFTPS) to allow business accounts to make payments on behalf of individuals

  • Delay implementation until detailed plans have been provided and to allow time for a public awareness campaign

What are the known exceptions and accommodations for the electronic payment mandate?

The EO provides exceptions for the following:

  • Individuals who do not have access to banking services or electronic payment systems

  • Certain emergency payments where electronic disbursement would cause undue hardship (noted in 31 C.F.R. Part 208)

  • National security or law enforcement-related activities where non-EFT transactions are necessary or desirable

  • Other circumstances as determined by the Secretary of Treasury

  • Alternative payment options will be provided to those who meet the exception. GoDirect, a government website for federal benefits, provides information on the mandate, electronic payment options and a waiver. While this is not specifically for income tax returns, it could be helpful information for individuals.

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