IRS issues FAQs on Modernizing Payments

the treasury dept

In Executive Order 14247: Modernizing Payment to and From America’s Bank Account (Executive Order), President Donald Trump required the U.S. Department of Treasury (in collaboration with the Internal Revenue Service (IRS) and other federal agencies) to receive and make payments to and from the federal government using electronic methods unless a reasonable cause can be made.

Recently, the IRS issued a frequently asked questions list regarding this transition. A few of the important questions and answers are summarized below; a more detailed list can be found here.

  • What changes are being made to how refunds are delivered? According to Executive Order, the U.S. Department of Treasury must stop issuing checks after September 30, 2025. Instead, these funds will generally be directly deposited into the taxpayer’s bank accounts.
  • Will taxpayers without bank accounts still be able to receive refunds? Yes. Alternative methods include payments via mobile apps and prepaid cards.
  • Will the transition delay tax refunds? Not in most cases.
  • What will happen if taxpayers do not include direct deposit information on their tax return? The IRS will send a letter to the individual asking to update their bank information using their last-known address on record.
  • Will this change how refunds are issued for deceased persons? The IRS will continue to accept check payments and issue check refunds for deceased persons.
  • Does Executive Order apply to payments made to the IRS? Yes. For now, checks and money orders will still be accepted, but the IRS strongly encourages taxpayers to make the payments using electronic options. The IRS will fully transition to only accepting electronic payments over time.
  • What payment options are available? Debit/credit card payments, IRS Direct Pay, IRS Individual Online Account, IRS Business Account, and Electronic Federal TA Payment System (EFTPS). EFTPS will sunset for individual taxpayers in late 2026.
  • Can businesses use cash or credit cards to make a payment? No.

These changes can affect many business and individual taxpayers. If you have any further questions on any of these, please contact your tax advisor.

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