Recent IRS guidance on the transition to electronic federal payments has been changed.
Overview of Changes
Executive Order 14247, Modernizing Payments To and From America’s Bank Account (View Federal Register Notice, March 28, 2025), directed the U.S. Department of the Treasury and IRS to transition toward primarily electronic payments, including both payments from the government (such as tax refunds, benefits, grants, and vendor payments) and payments to the government (such as taxes due, fees, and penalties). Electronic payments are generally faster, more secure, and reduce processing costs and errors compared to paper checks. While the original guidance indicated a quicker rollout, the IRS has since delayed full implementation, with mandatory electronic payments and refunds now expected in 2027, giving taxpayers and organizations additional time to prepare. This change does not impact how 2025 tax returns are filed.
Recommended Next Steps
Although paper payments are still accepted, you can begin preparing now for the upcoming Executive Order set to go into effect by following the steps below:
- Use direct deposit for tax refunds to receive funds more quickly and securely.
- Review your banking information to ensure accuracy.
- Make tax payments electronically using IRS Direct Pay or bank debit options.
- Consider a separate account dedicated to tax payments and refunds for added privacy.
- Obtain an IP PIN to protect against identity theft and fraudulent filings. Follow this link to learn how to obtain an IP PIN.
- Create an IRS Online Account to monitor balances, payments, and tax records. Learn how to set up an IRS account here.
- You may also grant your HeimLantz advisor access to your IRS account (if no Power of Attorney is on file), allowing us to better assist you.
Sharing financial information with the IRS may raise concerns, at HeimLantz our goal is to help you navigate these changes while protecting your personal information.
HeimLantz will continue to monitor developments and provide our clients with updates as additional guidance is released.
As always, please feel free to contact us at 410-841-5575 if you have any questions.