IRS releases FAQs on Executive Order 14247 payment modernization

The IRS has released updated guidance on Executive Order 14247, Modernizing Payments to and From America’s Bank Account, reshaping how taxpayers make payments to the IRS and receive tax refunds. The guidance clarifies how the IRS will phase out paper refund checks and expand electronic payment requirements.  

What is changing and when 

Under the modernization initiative, the IRS will: 

• Phase out paper refund checks, making direct deposit the standard refund method 
• Gradually require most taxpayer payments to the IRS to be made electronically 
• Rely more on online tools for tracking refunds and managing balances 

The U.S. Treasury Department and IRS started phasing out paper tax refund checks and other disbursements on Sept. 30, 2025. 

The new norm for refunds 

For most clients with checking or savings accounts, direct deposit should be the first choice when filing returns. Tax professionals should: 

• Encourage early setup of direct deposit in the client organizer or return worksheet 
• Confirm bank routing numbers and account numbers at the start of the engagement 
• Educate clients about split refunds, which allow funds to be directed to multiple accounts 

Individual tax payments to the IRS 

For now, mailed payments to the IRS, including checks and money orders, will still be accepted and processed. However, over time, the IRS will fully transition to electronic methods. The IRS will accept checks when electronic payment methods are not available for certain transaction types or in specific situations, such as hardship cases and/or legal and procedural requirements. 

Expanding electronic payment options for individuals 

Several electronic payment options can be used now and in future tax years: 

• IRS Direct Pay 
  Taxpayers can pay directly from a bank account with no fees. Direct Pay allows timely payments and advance scheduling. 
• Electronic Federal Tax Payment System (EFTPS) 
  EFTPS is valuable for businesses and currently enrolled individuals who want a scheduled, trackable payment method from a bank account. Enrollment takes time, so early setup is essential for businesses. (Individuals are no longer able to newly enroll as of Oct. 18, 2025.) 
• Electronic Funds Withdrawal (EFW) 
  Available when e-filing a return, EFW allows clients to authorize a direct bank debit. 
• Debit and credit card payments 
  These options remain available, though they may involve processing fees charged by payment processors. 

The IRS will increasingly shift taxpayers toward these digital tools rather than mailed checks or cash payments. 

Addressing clients without bank accounts 

Not all taxpayers have traditional bank accounts or may face barriers to electronic payments. For those clients, tax professionals should discuss alternatives early in the engagement process. These may include: 

• Prepaid cards with direct deposit capability 
• Third-party digital accounts that allow electronic transfers 
• IRS-approved alternative electronic accounts when permissible 

Taxpayers who cannot use electronic methods may qualify for a limited exception. The IRS is expected to provide additional guidance on eligibility and procedures as implementation continues. 

Businesses that receive refunds and make tax payments 

The IRS will be adding the direct deposit option to most business tax return types. Over time, paper check refunds for businesses will be phased out.  

For payments to the IRS, the IRS is expanding its digital payment system capabilities. The IRS acknowledges that some entities, such as trustees and fiduciaries, rely on bulk check payments and will issue additional guidance as applications become available for use.  

Bottom line for tax professionals 

Modernizing payments affects both refunds and payment workflows, and the IRS is continuing to release guidance as the transition unfolds. Tax professionals should help clients prepare for expanded electronic refund and payment options while understanding that limited exceptions may still apply. NATP will continue tracking Executive Order 14247 developments and provide updated resources and practitioner-focused guidance.