Article | Tax Alert

Executive Order 14247, “modernizing payments to and from America’s bank account.”

Sept. 11, 2025 · Authored by Andrew Whitehair

On March 25, 2025, President Trump signed Executive Order 14247 requiring all federal disbursements and receipts — including tax payments and refunds — to be made electronically. Most taxpayers already use IRS direct pay, EFTPS, electronic funds withdrawal (during e-filing) or direct deposit. However, there are certain categories of taxpayers and return types for which electronic payment may not currently be available or may present other hardships. Other taxpayers simply prefer writing checks or do not have access to a U.S. financial institution.

Note: On Aug. 14, 2025, Treasury announced that the federal government will stop issuing paper checks for most federal payments on Sept. 30, 2025. At this time, Treasury continues to accept tax payments in the form of paper checks.

What does the Executive Order require?

Tax refunds

Section 3(a) addresses the electronic payment of tax refunds. It states, “effective Sept. 30, 2025, and to the extent permitted by law, the Secretary of Treasury shall cease issuing paper checks for all federal disbursements inclusive of intragovernmental payments, benefits payments, vendor payments and tax refunds, except as specified in section 4 of this order.”

The order mandates that the IRS stop issuing paper refund checks as of Sept. 30, 2025.

The order considers that exceptions to this mandate may be necessary. Section 4 directs Treasury to review and revise procedures for granting limited exceptions where electronic payment and collection may not be feasible. Section 4 specifically includes an exception for “individuals who do not have access to banking services or electronic payment systems.” The order also includes a broad exception (section 4(iv)) which includes “other circumstances as determined by the Secretary of the Treasury, as reflected in regulations or other guidance.”

Earlier this year, Treasury said it will issue further guidance outlining phase-out timelines, exception criteria and transition support in the near future. Treasury has yet to provide further details or guidance.

Tax payments

Section 3(c) addresses the electronic payment of tax payments. It states, “as soon as practicable, and to the extent permitted by law, all payments made to the Federal Government shall be processed electronically, except as specified in section 4 of this order."

Unlike the order directing Treasury to issue payments electronically, there is no specified deadline for taxpayers to make electronic tax payments. Additionally, exceptions for individuals and other circumstances may be available as already noted.

Possible issues with implementation

There are a number of challenges with implementing this order.

Various taxpayers are currently unable to comply with this order and will require an exception to the order or will need Treasury to provide alternative payment options, including but not limited to the following:

1. International taxpayers limited by banking regulations from making ACH deposits and withdrawals through the U.S. banking system to or from their foreign bank accounts
2. Taxpayers (such as foreign nationals) who do not have an ITIN or SSN and thus are unable to use electronic payment systems
3. Trusts and estates currently do not have an option for direct deposit

Other than a limited option for extremely large refunds, there currently exists no method for estates and trusts to receive electronic payment of their refunds. Furthermore, the IRS requires the name on a tax return to match the name on a bank account when it issues refunds. This presents unique challenges for estates, such as when an estate (Form 1041) may receive a refund from a decedent’s final Form 1040.

As noted above, Treasury does not have a method for electronically paying refunds to several classes of taxpayers and it is unlikely they will provide alternative means prior to the Sept. 30, 2025, deadline. Additionally, it is not clear whether Treasury can legally withhold a taxpayer’s refund solely because a means of disbursing electronic payment is unavailable. The Internal Revenue Code does not include a mandatory method of payment. Historically, when the IRS is unable to issue an electronic payment, it defaults to a paper check.

It is generally recommended that taxpayers, to the extent that they are able to comply with this order, should do so as soon as practical. Those interested in adopting a means of making electronic payment can see the IRS website for a complete list of options. Taxpayers who are unable to comply (whether that is due to IRS system limitations, other laws and/or regulations, etc.), can proceed to file and pay their tax obligations under existing methods and await further Treasury guidance.

If you have questions on how this may impact your tax situation, please contact your Baker Tilly tax advisor. 

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.