What the End of Paper Checks in Tax Payments Means for You

A significant regulatory shift has already changed the way taxpayers and the IRS exchange funds. Effective September 30, 2025, the federal government officially ended the use of paper checks for tax-related payments and refunds.

This is not a minor administrative adjustment. For decades, the paper check was a mainstay in the payment process. Many taxpayers, both individuals and businesses, relied on them to pay balances due or receive refunds. But under this new mandate, all transactions must now flow electronically, signaling a modernization of the tax payment system in line with the broader digital economy.

Why the Change?

The rationale for the move is clear: electronic payments are faster, more secure, and less costly. Paper checks carried obvious risks—loss, theft, and forgery—that electronic funds transfers are designed to mitigate. Beyond security, electronic payments reduce administrative burdens for both the IRS and taxpayers by cutting down processing time and costs associated with printing and mailing. The order also reinforces a larger federal push toward modernization, one that aligns with the financial practices most individuals and businesses already use in their everyday lives.

From an accounting perspective, this modernization benefits financial operations. Electronic transactions provide stronger audit trails, tighter controls, and more reliable records. These elements are crucial not only for compliance but also for internal reporting and cash flow management.

Who Is Affected?

Nearly everyone is touched by this shift. From individuals who previously received refunds by paper check and must now provide direct deposit details, to businesses that once mailed checks to settle tax liabilities and must now use IRS-approved e-payment systems, the impact is broad. Accounting firms and payroll providers must also ensure their systems are fully compatible with this new framework. While some states may continue to allow checks for state-level taxes, all federal tax-related payments and refunds now require electronic processing.

What to Do (Now)

Although the deadline has passed, it’s not too late to put the proper systems in place. For those who are still adjusting, take the following steps without delay:

1. Assess Current Usage: Identify any remaining situations where you or your business attempted to use paper checks for tax transactions after September 30, 2025. Determine where gaps still exist.
2. Review Banking and Software Infrastructure: Make sure your accounting or tax software is IRS-certified for electronic payments. If not, consider upgrades or alternatives that align with federal requirements.
3. Select and Implement a Payment Method: The IRS has confirmed several acceptable electronic payment options, including the Electronic Federal Tax Payment System (EFTPS), IRS Direct Pay, debit or credit card payments through approved processors, and ACH transfers. Choose the option best suited for your situation and make it standard practice.
4. Update Policies and Internal Controls: Adapt your accounting policies and procedures to reflect electronic processes. This includes updating approval chains, reconciliation methods, and fraud-prevention measures.
5. Test and Normalize: Use current and upcoming tax payments as opportunities to normalize electronic methods. Regular use will help your team adapt and reduce the likelihood of mistakes.

A New Normal in Tax Transactions

The elimination of paper checks in federal tax payments and refunds is more than a change in mechanics—it is a redefinition of the system itself. For those who long relied on checks, the adjustment may feel disruptive. Yet the benefits—speed, security, and efficiency—are already becoming apparent. Businesses and individuals who have embraced electronic methods are finding that the process reduces administrative burden while enhancing financial oversight.

It's also important to note that the IRS has not provided exceptions or waivers to this rule. Taxpayers without bank accounts or those accustomed to paper checks will need to make arrangements to comply.

Seek Proper Guidance When You Need It Most

This new standard is here to stay. The sooner you align your practices, the smoother your compliance and financial processes will be. For anyone still navigating this new reality, don’t delay. The system has already changed, and the IRS is not making exceptions for outdated processes. If you need help identifying your exposure, implementing compliant solutions, or integrating electronic methods into your broader financial strategy, contact your CRI advisor. We’re here to help this transition strengthen not just your compliance, but your overall financial operations.