As part of a modernization initiative, the IRS is moving away from paper-based transactions and shifting toward electronic payments and refunds. This transition affects how taxpayers receive refunds and how they submit tax payments, including estimated taxes, extension payments, and balances due. By phasing out paper checks, the IRS aims to strengthen security, reduce fraud risk, and streamline processing to deliver faster, more efficient service.
Refunds
The IRS stopped issuing most paper refund checks after Sept. 30, 2025. Direct deposit will now be the primary method of receiving refunds. The IRS emphasizes that the filing of a tax return itself does not change; only the method of receiving refunds is affected. Taxpayers who do not provide direct deposit information may experience significant delays in receiving refunds.
Tax Payments
Payments to the IRS are also transitioning to mandatory electronic methods. While checks are still being processed for now, the IRS plans to phase this out in the near future. Current electronic options include IRS Direct Pay, IRS Online Account, debit/credit card payments (fees apply), and digital wallets. The Electronic Federal Tax Payment System (EFTPS) is being phased out for individuals; new enrollments ended Oct. 17, 2025, and full discontinuation is expected later in 2026.
For trusts making federal tax payments, there are still a couple of options. Payments may be made through the EFTPS. Trusts are not currently supported under IRS Direct Pay or the IRS Online Payment system. Payments may still be submitted by mailing a check with the appropriate payment voucher. As the IRS continues to move toward full electronic processing, it remains unclear when paper‑check options will be phased out.
What This Means For You
Ensure your direct deposit information is up to date with your tax preparer before your tax return is filed.
Transition to making tax payments online, the recommended options include IRS Direct Pay, IRS Online account (details below), and EFTPS (this will sunset for individuals in late 2026). Currently, the IRS is still accepting and processing paper checks for tax payments; however, this is expected to be completely phased out in the near future. As such, we would advise that our clients begin making payments electronically in order to familiarize themselves with this process.
The IRS encourages taxpayers to create an IRS Individual Online Account. This is available to anyone who can verify their identity when setting up the account. Key highlights of having an online account include:
- Make online payments and review payment history.
- Receive and view IRS digital notices regarding your account.
- Check the status of refunds and amended returns.
- View and download certain tax documents, including account transcripts.
- Request and access an identity protection PIN.
GBQ encourages the use of online accounts for clients in order to improve visibility of payments on account and streamline information gathering. If you have questions or concerns, please reach out to your GBQ advisor.
Are you looking for additional tax insights and guidance? Check out these resources:
IRS Issues Guidance On Tips & Overtime Deductions Under The OBBBA
Section 174 Update: OBBBA Allows Immediate Write-Off Of U.S. R&D; Foreign Still 15 Years
Navigating Individual Tax Changes Under The One Big Beautiful Bill Act (OBBBA)
