Tax Payments Mandate

On March 25, 2025, the President signed Executive Order 14247 – Modernizing Payments to and From America’s Bank Account. This order mandates that all payments to and from the Federal Government must be processed electronically, eliminating the use of paper checks and money orders for federal transactions. The Order is intended to increase efficiency, reduce fraud and theft, minimize delays, and lower administrative costs. This mandate includes payments to the Internal Revenue Service.

What You Need to Do

Tax Payments: The IRS will announce the date that paper checks will no longer be accepted. Until then, payments can be made by paper check or one of the following electronic methods. However, it is recommended that you determine your electronic payment method early and understand your payment options. Additional guidance will be issued by the IRS prior to the 2026 tax filing season.

· IRS Direct Pay – Follow the link at irs.gov to make a payment, then select to pay from your bank account. You do not need to set up an account with the IRS to do this.

https://www.irs.gov/payments/direct-pay-with-bank-account

· Online account – Create an account at irs.gov to make payments and see your payment history.

https://www.irs.gov/payments/online-account-for-individuals

· Electronic Federal Tax Payment System (EFTPS) – Create an account to make payments. The account set-up process may take 6 – 8 weeks.

§ Individuals must enroll in EFTPS by 10/17/2025.

§ EFTPS will no longer be available for tax payments to all individuals later in 2026.

https://www.irs.gov/payments/eftps-the-electronic-federal-tax-payment-system

· Debit or credit card or digital wallet payments - Follow the link at irs.gov to make a payment, then select Pay by debit card, credit card or digital wallet.

https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card

· Electronic funds withdrawal during e-filing – At the time of filing your income tax return, most tax software can indicate that your balance due and upcoming estimated payments be paid by direct debit. Once this method is indicated and the tax return is filed, this option cannot be changed through the tax filing software.

Tax Refunds: The Executive Order also requires all payments from the Federal Government to be in electronic format. This includes tax refunds from the IRS as well as Social Security payments, which will have to be received by direct deposit into a bank account. The IRS has announced that paper tax refund checks for individual taxpayers will be phased out beginning on September 30, 2025. Thus, any tax refunds will need to be directly deposited into the taxpayer’s bank account.

Exceptions

You should be aware that exceptions may apply for individuals who:

· Lack access to banking services or digital payment technologies

· Face undue hardship due to the transition

The Department of the Treasury is expected to release guidance on how to request waivers in such cases.

Final Thoughts

This change is significant, but with early preparation, it can be a smooth transition. If you have any questions or need assistance setting up your electronic payment options, please don’t hesitate to reach out. McGill Power Bell & Associates, LLP is here to help you navigate this change efficiently and ensure your compliance with the new federal requirements.