Questions and Answers About Executive Order 14247: Modernizing Payments To and From America’s Bank Account

Executive Order 14247: Modernizing Federal Payment Systems (FS-2026-02, Jan. 27, 2026)

The U.S. Department of the Treasury and the IRS released updated guidance (FS-2026-02, January 27, 2026) explaining how Executive Order 14247 will modernize federal payment systems. The goal of the Executive Order is to transition federal payments away from paper-based methods toward secure electronic transactions.

This change focuses on improving payment security, reducing fraud, increasing efficiency, and lowering administrative costs. Paper checks and money orders are more likely to be lost, stolen, delayed, or altered compared to electronic payments. As a result, the federal government is gradually moving toward digital payment systems for both issuing payments and receiving payments.

Importantly, the process of filing tax returns itself is not changing. The updates primarily affect how refunds are issued and how payments are made.

Topic A: Individual Refunds and Disbursements

Beginning September 30, 2025, the federal government started phasing out paper refund checks for individual taxpayers, to the extent allowed by law. Most refunds are now expected to be issued electronically, primarily through direct deposit.

Taxpayers without traditional bank accounts will still be able to receive refunds through alternative electronic options, such as prepaid debit cards or approved digital payment platforms. Limited exceptions for paper checks will remain available in hardship or special circumstances.

Taxpayers are encouraged to ensure their direct deposit information is accurate when filing their tax returns. Electronic refunds are expected to be faster and more secure, reducing delays commonly associated with mailed checks.

If banking information is missing, the IRS may contact taxpayers by mail requesting updated information. The IRS will not request banking details by phone or text message. If no response is received, a paper check may eventually be issued after additional processing time.

At this time, there are no changes to how refunds for deceased taxpayers are handled.

Topic B: Payments to the IRS

The Executive Order also applies to payments made to the IRS. While checks and money orders are still being accepted for now, the IRS is actively encouraging taxpayers to transition to electronic payment methods.

Available electronic payment options include:

• IRS Direct Pay from a bank account
• IRS Online Account payments
• Debit or credit card payments
• Digital wallets
• Electronic Federal Tax Payment System (EFTPS)

Over time, reliance on mailed payments will decrease. Individual taxpayers will eventually be required to transition away from EFTPS, with full changes expected later in 2026.

Electronic payments offer faster processing, immediate confirmation receipts, and lower error rates compared to mailed payments.

Cash payments remain available through authorized retail partners under certain programs, but limits and fees may apply.

Topic C: Businesses

Businesses will also experience a gradual transition to electronic payments. The IRS is expanding direct deposit options for business tax refunds, allowing companies to receive funds more quickly and securely.

Businesses can continue to make payments using electronic methods such as:

• IRS Business Tax Account
• Direct Pay
• EFTPS
• Approved electronic payment providers

Businesses that previously relied on bulk check payments, such as payroll providers or trustees, will be provided with expanded digital alternatives as new systems are developed.

Federal Tax Deposits must already be made electronically, and failure to do so may result in penalties unless reasonable cause is established.

Topic D: International Taxpayers

International taxpayers may continue using current filing and payment methods while the IRS develops additional electronic payment solutions. Wire transfers remain available for payments, and partnerships with international payment providers are being explored to improve refund delivery outside the United States.

The goal is to ensure faster and more reliable cross-border transactions without requiring U.S. bank accounts.

Topic E: Third-Party Stakeholders

Third parties such as tax professionals, trustees, payroll processors, and other intermediaries will also need to transition toward electronic payment systems as modernization progresses.

Current tools, including the EFTPS Batch Provider system, remain available for professionals managing multiple payments on behalf of clients. The IRS plans to provide training, technical resources, and updated guidance to help third-party stakeholders adapt during the transition.

Paper checks may still be accepted in cases where electronic systems are not feasible or where legal or procedural requirements exist.

Key Takeaway

Executive Order 14247 represents a long-term shift toward fully electronic federal payments. The IRS aims to improve payment security, reduce fraud, and speed up processing while maintaining flexibility for taxpayers who face hardship or lack access to traditional banking services.

For most taxpayers and businesses, the practical impact will be a stronger emphasis on direct deposit and electronic payment methods rather than mailed checks. Filing tax returns remains unchanged, but payment delivery and receipt methods are steadily modernizing.