IRS Now Requires Electronic Payments
With a federal mandate shifting all agencies to electronic payments by Sept. 30, 2025, IRS refunds will require bank details on file. Paper checks may no longer be accepted for payments, so taxpayers should plan accordingly.
Dear Clients,
This courtesy memo is to notify you of significant changes that may affect how you make payments to, and receive refunds from, the Internal Revenue Service (IRS).
On March 25, 2025, the Trump Administration issued Executive Order 14247 “Modernizing Payments To and From America’s Bank Account” which directs federal agencies to transition to fully electronic payment systems by September 30, 2025. This order unambiguously requires the Treasury Department to stop sending payments out through paper means, but is ambiguous about the Treasury’s IRS department receiving paper payments. The federal government, including the IRS, therefore, may or may not accept paper checks and paper-based payments as of October 1, 2025. Regardless, we recommend that all clients transition from paper payments to electronic payments if they have not already done so. Please keep this in mind if you expect to need to make a tax payment with the upcoming October 15 extension deadline.
What Does This Mean for You?
1. After September 30, if you are expecting a tax refund from the IRS, you will need to have valid bank account information on file with the IRS to receive your refund, or there could be delays in processing.
2. To issue a tax payment, use an approved electronic payment method. We recommend the following options:
| Payment Method | Most Ideal Use Case |
|---|---|
| IRS Direct Pay | Best for one-time payments from a bank account—e.g., paying a balance due after filing. No login needed. |
| Debit/Credit Card or Digital Wallet | Suitable for taxpayers who don’t mind paying a fee in order to earn card rewards and have payment flexibility. |
| IRS Online Account | Ideal for individuals who want to track their tax balance, view payment history, and manage payments in one place. |
| EFTPS (Electronic Federal Tax Payment System) | Best for businesses or individuals making regular/quarterly estimated tax payments. Enrollment provides added control and scheduling. |
| Work with your CPA | Best for clients who prefer hands-on assistance with setup, payment execution, and refund tracking, especially during tax prep season. |
For clients with Estates and Trusts, the U.S. Department of the Treasury has not provided direction on how these payments are to be handled, as payments for Form 1041 cannot be paid via direct debit. It is unclear when the Treasury plans to release further guidance and support.
New Capital is prepared and ready to assist clients with ensuring a smooth transition to electronic-only tax transactions. Here are some ways that we can help you:
Discuss your payment options and help you make the best choice for your situation
Assist you (via Zoom) with enrolling in your chosen payment system
We are also researching other third-party payment systems that we may in the future employ for clients’ bill and tax payment needs.
Sincerely,
Casey Moss, PACE
Administrative & Operations Manager
New Capital Management
713-322-6217
cmoss@newcapitalmgmt.com