The IRS Is Moving Away From Paper Checks: What You Need to Know

The IRS is changing how money moves between taxpayers and the federal government. This shift is part of a broader effort to modernize payment systems, reduce fraud, and improve reliability.

For many taxpayers, the impact will be minimal. For others, a small amount of preparation can help avoid delays. Below is a clear breakdown of what is changing, what is staying the same, and what steps may be worth taking now.

What Is Changing
The IRS is phasing out most paper checks for tax refunds and continuing to expand electronic payment options for taxes owed. Direct deposit and other approved electronic methods are becoming the standard.

Electronic payments are faster, more secure, and far less likely to be lost, delayed, or intercepted. These changes apply to both individual taxpayers and businesses.

What Is Not Changing
The way you file your tax return is not changing. You will continue to use the same forms, software, or tax professional you use today.

This update affects how money is delivered and received after a return is processed, not how returns are prepared or filed.

Receiving Your Refund
If you already receive your refund by direct deposit, no action is needed.

Paper refund checks are now limited. Direct deposit is the primary method for issuing refunds, with alternative electronic options available in certain circumstances.

Taxpayers without traditional bank accounts are not excluded. In some cases, refunds may be issued to prepaid debit cards or approved electronic payment services. Limited exceptions also exist for hardship or legal situations.

How Refunds Are Handled Without Banking Information
Providing direct deposit information is optional, but leaving it out can slow the refund process.

If a return is filed without banking information and a refund is due, the IRS will process the return and then send a letter by mail requesting payment details. Until that information is provided or an exception applies, the refund may be delayed.

Including direct deposit information when filing remains the simplest way to avoid follow up notices and timing issues.

Paying Taxes Electronically
Checks and money orders are still accepted for now, but the IRS strongly encourages electronic
payments.

Available options include direct pay from a bank account, IRS online accounts, debit or credit cards, and digital wallets. Electronic payments post more quickly, provide immediate confirmation, and reduce processing errors.

Taxpayers who use EFTPS should be aware that new enrollments are closed and a gradual transition to IRS online accounts or direct pay is expected.

What Businesses Should Expect
Businesses are experiencing similar changes.

More business tax returns now support direct deposit for refunds, and electronic payment options continue to expand. While paper checks will still be accepted in limited cases, electronic payments are becoming the new standard.

Businesses that rely on bulk or high-volume payments can expect additional electronic tools to support those needs over time.

How to Prepare
A few simple steps can help ensure a smooth transition:
• Confirm direct deposit information before filing
• Consider opening a low cost bank or credit union account if needed
• Read and respond promptly to IRS notices sent by mail
• Seek guidance if your situation involves unique payment or refund circumstances

Have Questions?
For most taxpayers, these changes will lead to faster refunds, clearer payment records, and fewer issues tied to lost checks.

If you have questions about how these updates affect your personal or business tax situation,
the Bowman team is here to help you understand the details and plan with confidence.

For Questions and answers about Executive Order 14247: Modernizing Payments To and From America’s Bank Account: View PDF Q&A