IRS to Phase Out Paper Refund Checks Under Executive Order 14247

September 25, 2025

Beginning October 1, 2025, the Internal Revenue Service will begin implementing the requirements of Executive Order 14247, a federal directive aimed at moving nearly all government payments—including tax refunds—into fully electronic delivery systems. This transition represents a significant modernization effort designed to improve efficiency, reduce administrative costs, and strengthen safeguards against fraud. According to government data, paper checks are 16 times more likely to be lost, delayed, or stolen compared to direct deposits, making electronic payments a far more secure option for taxpayers.

Today, approximately 94% of taxpayers already receive their refunds through direct deposit, meaning the majority will not experience major disruptions. However, the IRS acknowledges that this change will most affect individuals without access to traditional banking services, as well as groups with specific personal or situational challenges. These include taxpayers who are unbanked or underbanked, Americans living abroad, individuals with disabilities, victims of domestic violence who may lack stable financial access, and those whose religious beliefs limit participation in electronic banking.

To address these concerns, the IRS is developing a formal exception process that will allow eligible taxpayers to continue receiving paper refund checks when electronic payment is not feasible or safe. Details of this process are expected to be released well before the policy takes effect.

For tax year 2025 returns filed in early 2026, taxpayers will be required to provide valid direct deposit information on their returns. Those who submit returns without banking details may face refund delays of up to six weeks unless an approved exception is in place. The IRS plans proactive outreach to taxpayers who omit this information, offering clear instructions on how to update account details, enroll in direct deposit, or request an exception if they qualify.

While this shift represents an important step in modernizing federal payment systems, IRS officials emphasize that the transition must be handled with care, clarity, and compassion to ensure equitable access. The agency’s goal is to streamline operations without leaving vulnerable taxpayers behind.

At PBS, we understand that changes to tax procedures can feel overwhelming, especially when they affect something as important as getting your refund. As your trusted payroll and benefits partner, we’re committed to keeping you informed about developments that impact your finances and tax obligations. Our team continuously monitors IRS updates and regulatory changes so that we can provide timely, accurate guidance when you need it most.