Effective September 30, 2025, the IRS and other federal agencies stopped issuing paper checks for most payments, including tax refunds. This change was mandated by Executive Order 14247, which directs the federal government to transition to electronic payments exclusively.
What this means for you:
The IRS estimates that about 94% of taxpayers already use direct deposit, but approximately 10 million people still receive paper checks. If you’re among them, it’s time to prepare for this transition.
The government’s goal is to improve efficiency, reduce fraud, and lower costs. According to the IRS, paper checks are 16 times more likely to be lost, stolen, returned, or altered than electronic payments. Mail theft of tax refunds costs taxpayers millions annually and creates stressful situations for those affected.
While we support modernization efforts that protect taxpayers, we also recognize this transition creates new challenges that require vigilance.
While electronic payments eliminate many risks associated with paper checks, they introduce their own set of security concerns:
Phishing and Scams: Fraudsters are already creating schemes to trick people into providing bank account information under the pretense of “setting up direct deposit with the IRS.” These scams will only increase.
Data Breaches: Your financial information must now be stored and transmitted electronically, making it a potential target for cyberattacks. A single breach could compromise thousands or millions of records.
Fake IRS Communications: Since the IRS will be contacting taxpayers who haven’t provided direct deposit information, scammers will exploit this by sending fake notices designed to steal your personal data.
Targeting Vulnerable Groups: Fraudsters often prey on those facing difficulties with the transition, including the unbanked, elderly, or those with limited technology access, by offering fake “assistance.”
Alternative Payment Risks: If you use digital wallets, prepaid cards, or other electronic methods, you need to understand the security protocols and risks of those services.
Despite these concerns, electronic payments do offer significant improvements over paper checks:
Here are essential steps every taxpayer should take:
1. Use Only Official IRS Channels: Update your direct deposit information only through your secure IRS Online Account at IRS.gov. Never use links from emails or text messages. For our customers, bank information should only be provided via secure client portals. Please refrain from providing this information via email or text.
2. Recognize IRS Scams Remember: The IRS will NEVER contact you by email, text message, or social media to request bank account information. Any such communication is a scam.
3. Identify Phishing Attempts Watch for messages with urgent language, threats, or pressure to act immediately. Don’t click links from unfamiliar senders.
4. Enable Multi-Factor Authentication When using IRS online tools or banking services, always enable multi-factor authentication (MFA) for an extra security layer.
5. Verify Before You Submit: Double-check that your account and routing numbers are entered correctly on your tax return. Errors will cause delays and complications. We cannot recall electronically filed returns once submitted.
6. Explore Your Options If you don’t have a bank account, consider low-cost or no-fee accounts at local banks or credit unions, or look into the Treasury-sponsored Direct Express prepaid debit card.
We take your security seriously. That’s why our firm is becoming a Protection Plus partner, allowing us to offer you enhanced guarantees and protection services.
All our tax clients, starting with the 2025 returns, will automatically receive this protection via Protection Plus as part of their tax preparation services.
Audit Assistance: If you receive a tax notice, inquiry, or audit, a team of CPAs and Enrolled Agents will handle the resolution with the IRS or state authorities for up to three years—including case assessments, correspondence, and representation.
Tax Fraud Assistance: If fraud prevents you from filing your return, Protection Plus will interact with the IRS on your behalf and help with the required paperwork to restore your return.
Tax Debt Relief: Assistance with identifying resolution options such as Offers in Compromise or installment agreements when facing additional taxes, penalties, and interest.
Tax Preparation Guarantee: If a legitimate preparer error causes you to incur penalties, taxes, or interest, you’ll be reimbursed up to $2,500.
Identity Theft Restoration: One year of identity theft restoration services for tax-related and non-tax incidents, covering your entire family. A Privacy Advocate will assist in restoring your identity by notifying banks, credit bureaus, and other relevant parties.
Action Steps:
This is a significant change, and we understand you may have concerns or questions. Please don’t hesitate to reach out to our office. We’re committed to making this transition as smooth as possible while keeping your financial information secure.
The move to electronic payments is ultimately designed to protect taxpayers and streamline the refund process. With the right precautions and professional support, you can navigate this change safely and confidently.
Stay informed, stay secure, and as always, trust your tax professionals to guide you through these changes.
Christine Gervais
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
