It’s happening. The Internal Revenue Service is going even more digital.
Giving taxpayers a choice to operate electronically has long been a goal of many in Uncle Sam’s tax agency. Danny Werfel, who served as IRS Commissioner before the second Trump administration, frequently touted plans to move the IRS into the 21st century.
But while Werfel always characterized expanded electronic IRS options as a taxpayer’s personal choice, the White House wants e-transaction for the tax and other federal agencies to be mandatory.
To get there, the Treasury Department and IRS today announced that, per Executive Order 14247, paper tax refund checks for individual taxpayers will be phased out beginning on Sept. 30, 2025.
Yes, your calendar is correct. That's next week.
Of course, since this is the federal government, and its tax operation specifically, there are a few caveats.
Tax business as usual in the short term: First, the phase-out will be “to the extent permitted by law.” This is a bit of cover your tush language to give the IRS time to come up with a system that doesn’t prevent taxpayers from getting their refunds.
While the number of taxpayers who still receive actual paper checks from the U.S. Treasury is minuscule in the grand scheme of annual refunds issued — this year, for example, of the almost 94 million refunds issued as of May 9, almost 93 percent of were directly deposited to taxpayers' financial accounts — any taxpayers not getting their refunds is unacceptable.
So, the IRS says that until it publishes detailed guidance for 2025 tax returns that will be filed next year,
taxpayers should continue using existing forms and procedures. This applies to those who got an extension to file their 2024 returns by Oct. 15 or later due to special circumstances.
And if in finally filing your extended Form 1040 you discover that you owe a bit more tax than you’ve already paid, the IRS also says that it will continue to accept all current payment options. That includes electronic transfers (which the executive order also wants to make the standard), as well as the old-fashioned paper payments via check or money order.
Again, the IRS will issue additional guidance and information for filing and paying taxes prior to the upcoming 2026 filing season.
Next electronic tax steps: While the IRS transitions to an even more electronic operation, both as far as issuing refunds and accepting tax payments, taxpayers should look into how they can be a part of the digital tax world.
This means getting a bank or other financial account into which your future tax refunds can be directly deposited.
I know. That’s difficult for many. But there are ways to accomplish it, with details in my post Open a bank account to get your tax refund sooner via direct deposit.
In the interim, or if you just don’t have access to a bank account, the IRS says prepaid debit cards, digital wallets, or limited exceptions will be available.
Why go electronic: As my blog post on opening a bank account notes, you’ll get your refund faster when you have the IRS deliver it electronically.
Directly deposited refunds, says the IRS, generally are issued in less than 21 days if a taxpayer also files the return electronically. Refunds send by U.S. Postal Service mail, on the other hand, may take six weeks or longer.
Direct tax refund deposit also is safer. The IRS says paper checks are more than 16 times more likely to be lost, stolen, altered, or delayed than electronic payments. Direct deposit also avoids the possibility that a refund check could be returned to the IRS as undeliverable.
And for Uncle Sam, the electronic transactions are more efficient and cost less than those issued as paper checks.
Part of me, though, wonders if anybody explained to 47, who was such of fan of rebate checks bearing his signature during his first term, that his executive order also will eliminate that grandstanding.
You also might find these items of interest:
- IRS receives 1 millionth uploaded tax document
- IRS’ latest moves enable more digital taxpayer interactions
- IRS adds W-2 and 1099-A forms to taxpayer online accounts
