What Does It Mean and What is the Latest Guidance From the IRS?
Following the requirements of President Trump’s Executive Order 14247 issued Mar. 25, 2025, the IRS issued News Release IR-2025-94 on Sept. 23, 2025, which provides limited insight on how the IRS may replace paper refund checks and accept tax payments. The Executive Order required the U.S. Treasury, effective Sept. 30, 2025, to cease issuing paper checks for all government payments, including tax refunds, with certain exceptions. Also, “as soon as practicable, and to the extent permitted by law, all payments made to the Federal Government (which include tax payments and deposits)” are required to be processed electronically, but again with certain exceptions.
The Executive Order required that the “Secretary of the Treasury shall submit an implementation report to the President … within 180 days of the date of this order (Sept. 23, 2025) detailing progress on the matters set forth in this order.” The Sept. 23 news release is the first announcement by the IRS concerning the Executive Order, and it appears to fall well short of its directive to “submit an implementation report … detailing progress on the matters set forth in this order.”
The release encourages taxpayers without bank accounts to open new free or low-cost bank accounts to which they can have refunds directed. It also mentions that “Options such as prepaid debit cards, digital wallets, or limited exceptions will be available” to those who don’t have access to bank accounts to receive their tax refunds.
The Executive Order directs the Treasury to grant limited exceptions from the electronic payment and receipt requirements for:
- Individuals who do not have access to banking services or electronic payment systems
- Emergency payments where electronic disbursement would cause undue hardship
- National security or law-enforcement related activities where non-EFT transactions are necessary or desirable
- “Other circumstances as determined by the Secretary of the Treasury, as reflected in regulations or other guidance”
What does the Executive Order and IR-2025-94 mean for individuals and businesses who receive federal tax refunds or make federal tax payments?
Tax Refunds
Virtually all electronic and many paper tax return filings enable taxpayers to provide bank account information to the IRS, which results in their receiving refunds through direct deposit. This is much faster than receiving them by paper check. Through May 9, 2025, the IRS had issued nearly 93.6 million tax refunds for the 2025 filing season, of which 86.9 million were issued electronically.
Although nearly 93% of tax refunds are made via electronic means, many individuals are “unbanked” or are uncomfortable with providing their banking information to the IRS and others (tax preparation software and service providers, etc.) for the purpose of receiving refunds or making tax payments.
On June 11, the Treasury’s Bureau of the Fiscal Service, the part of the government that actually issues tax refunds, announced that “effective October 1, it will transition its check disbursement operations to a designated third-party provider and that this shift will significantly reduce the government’s capacity to issue paper checks.”
For refunds, the news release indicates that the Treasury or possibly third-party processors may start issuing prepaid debit cards to individuals for whom the IRS does not have banking deposit information. However, the IRS news release is devoid of details.
Tax Payments
Regarding tax payments, the Sept. 23 news release merely confirms that the Order also applies to payments, that “taxpayers should continue to use existing payment options until further notice,” and that additional guidance will be released before the 2026 filing season. No other details are provided in the release.
Additional Guidance is Forthcoming
Under the Executive Order, Treasury is directed to implement a comprehensive public awareness campaign to inform federal payment recipients of the transition to electronic payments, including guidance on accessing and setting up digital payment options.
While the guidance provided in IR-2025-94 sheds some light on the implementation of EO 14247, questions remain, especially for taxpayers who wish to receive refunds without providing bank account information. CBIZ expects further guidance may be forthcoming.
If you have any questions about the Order and IRS’s implementation of its provisions, don’t hesitate to get in touch with your CBIZ representative for more information.
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