Tax Tip Tuesday: What to Know About the Federal Shift to Electronic Payments

Pursuant to Executive Order 14247, signed on March 25, 2025, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) have begun a comprehensive transition to a digital-first federal payment system. This is a significant shift in how the federal government handles financial transactions.

Effective September 30, 2025, the Treasury has begun phasing out the issuance of paper tax refund checks for individual taxpayers, with limited exceptions. This modernization effort is designed to increase security, reduce the high rate of mail fraud, and accelerate the delivery of funds.

What Electronic Payments Mean for You

The IRS is moving toward a standard in which all tax refunds and payments are processed electronically. To remain compliant and avoid delays, taxpayers should prepare now by taking the following steps:

• Electronic Refunds: Direct deposit is now the primary method for all federal tax refunds. To ensure timely delivery, please confirm that we have your most current and accurate banking information (including routing and account numbers) before filing your tax return.

• Electronic Payments: While the IRS still accepts paper checks for certain balances in the immediate term, it is strongly encouraging taxpayers to move to digital payment platforms. Electronic payments are processed significantly faster and provide an immediate digital audit trail.

Recommended Payment Portals

For any federal tax liabilities, the Treasury recommends the following options:

• For Individuals: IRS Direct Pay allows individuals to pay tax balances or estimated taxes directly from a checking or savings account at no cost. No registration is required.

• For Businesses: Electronic Federal Tax Payment System (EFTPS) is ideal for businesses and individuals making large or recurring tax payments. Enrollment is required and includes a mail-based verification process, so early setup is recommended.

• IRS Online Account: Taxpayers are also encouraged to create an IRS Online Account to view balances, track payment history, and manage digital communications with the IRS.

Here to Help

We are committed to helping you navigate these procedural changes. If you have any questions, we are here to help. We build value-added relationships with each client to understand their business structure and provide solid solutions. Our approach offers direct access to the firm's decision-makers. Our innovative cross-functional services help businesses address the challenges ahead.