IRS modernizes payments to and from taxpayer bank accounts
Internal Revenue Service Fact Sheet FS-2026-02. Executive Order 14247.
The IRS is moving federal tax payments and refunds to electronic methods. Paper checks are being phased out, with limited exceptions.
Overview
The U.S. Department of the Treasury and the IRS are implementing Executive Order 14247. The order directs federal agencies to modernize payments to reduce fraud, cut costs, and improve security.
The policy applies to both directions of money flow:
Payments from the government, including tax refunds.
Payments to the government, including taxes, penalties, and fees.
The process of filing a tax return does not change. Only the payment and refund delivery methods change.
Key Effective Dates
March 25, 2025: Executive Order 14247 signed.
September 30, 2025: IRS begins phasing out paper refund checks, where permitted by law.
October 17, 2025: Individuals can no longer enroll in EFTPS.
Late 2026: EFTPS fully sunset for individual taxpayers.
Refunds to Individuals
Direct deposit becomes the default method for refunds.
Paper refund checks are phased out, with limited exceptions.
Taxpayers without bank accounts can use alternatives such as:
Certain prepaid debit cards.
Certain mobile payment apps.
Hardship and legal exceptions remain available.
If direct deposit information is missing:
The return is still processed.
The IRS sends a letter requesting banking information.
A CP53E notice follows, with a 30-day response window.
No phone or text requests are used.
If there is no response, a paper check may be issued after six weeks.
Refund processing times generally improve with faster electronic delivery.
Payments to the IRS
Checks and money orders are still accepted for now.
The IRS strongly encourages electronic payments.
Over time, paper remittances will be reduced.
Available electronic options include:
IRS Direct Pay from a bank account.
IRS Online Account for Individuals.
IRS Business Tax Account.
Debit card, credit card, or digital wallet.
Cash payments through Vanilla Direct at participating retail locations.
EFTPS for enrolled users, with a planned sunset for individuals.
Electronic payments provide immediate confirmation and faster posting.
EFTPS Changes for Individuals
New enrollments ended October 17, 2025.
Existing individual users may continue temporarily.
All individuals must transition off EFTPS later in 2026.
Businesses continue to use EFTPS for federal tax deposits.
Businesses
Direct deposit is being added to most business refund forms.
Business paper refund checks will be phased out over time.
Businesses must make federal tax deposits electronically.
Bulk and trustee payment solutions are expanding.
Additional technical guidance is forthcoming.
International Taxpayers
Existing filing, payment, and refund options remain in place.
Wire transfers continue to be accepted.
Treasury and the IRS are developing additional cross-border payment solutions.
Third Parties
Trustees, payroll providers, and tax professionals are expected to use electronic payment systems as available.
EFTPS Batch Provider remains available.
Paper checks are accepted where electronic methods are not feasible.
Circular 230 compliance is maintained when practitioners use approved electronic methods.
Why It Matters
Reduces fraud and lost payments.
Accelerates refunds and payment posting.
Lowers administrative costs for taxpayers and the government.
Signals a long-term shift away from paper across the federal tax system.
The IRS is transitioning refunds and payments to electronic methods under Executive Order 14247, while preserving limited exceptions.
The Takeaway
Electronic payments are becoming the standard for dealing with the IRS. Taxpayers who prepare now will avoid delays later.