Treasury Stops Issuing Paper Checks
The White House on March 25, 2025, issued Executive Order 14247, “Modernizing Payments To and From America’s Bank Account.” The executive order states that effective September 30, 2025, to the extent permitted by law, the Secretary of Treasury will cease issuing paper checks for all federal disbursements, which includes tax refunds.
In addition to establishing the September 30 deadline for stopping paper checks, the executive order also provides that payments to the federal government should be made electronically as soon as practicable. The executive order indicates that the purpose is to modernize and minimize the costs, delays, risks, and inefficiencies that paper-based payments entail. It notes that mail theft has increased in recent years, and Department of Treasury paper checks are significantly more likely to be reported lost or stolen, returned, or altered than electronic funds transfers (EFTs).
The executive order instructs Treasury to support the transition to digital payment methods, such as direct deposits, debt or credit card payments, digital wallets, and other electronic payment systems. Treasury is authorized to grant limited exceptions when electronic payment is not feasible, including for individuals who do not have access to bank services or electronic payments systems. Other potential exceptions include:
Emergency payments when electronic disbursement would cause undue hardships;
National security and law enforcement-related activities when non-EFT transactions are necessary or desirable; and
Other circumstances as determined by the Secretary of the Treasury.
On August 14, 2025, Treasury issued a news release indicating that it will stop paper checks for most federal benefit items on September 30, 2025.
EHTC Insights
Treasury has moved towards electronic payments, and away from issuing paper checks, effective September 30, 2025. Taxpayers that typically receive paper checks for tax refunds should plan instead on receiving their refunds via direct deposit. Taxpayers that typically send paper checks for tax payments due should plan to utilize one of the following IRS-approved methods for electronic payments:
IRS Online Account for Individuals or Businesses
IRS Direct Pay (from a checking or savings account)
Electronic Federal Tax Payment System (EFTPS)
Note: The last day an individual can enroll to make payments using the EFTPS system will be on October 17, 2025.
Debit/credit card or digital wallet via authorized payment processors
Want to learn more or discuss how this executive order applies to you? Connect with the EHTC Tax Services team using the button below.
Frequently Asked Questions (FAQ)
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In the event of a refund, the IRS will be sending letters to individuals that do not provide banking information with their tax returns in an attempt to obtain that information.
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If a taxpayer mails a check to the IRS for a tax balance due after the September 30, 2025 cutoff date, the IRS will not accept the check. The IRS will return the check to the taxpayer and provide instructions to make the payment electronically using an approved method. If the taxpayer does not remit payment electronically in a timely manner, penalties and interest for late payment may apply.
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If a taxpayer receives a returned check from the IRS after the September 30, 2025 cutoff date, they should take the following steps:
Do not resend a paper check.
Remit payment electronically.
Make the payment as soon as possible.
Retain documentation of the returned check and your electronic payment.
By following these steps, the taxpayer will comply with the new electronic payment requirements and minimize the risk of additional penalties and interest.
Some content borrowed with permission from BDO USA. Our firm is an independent member of the BDO Alliance USA, a nationwide association of independently owned local and regional accounting, consulting, and service firms.
