ARTICLE | May 14th, 2025

As part of a sweeping initiative to modernize federal payment systems, the IRS and the U.S. Treasury will officially discontinue the acceptance and issuance of paper checks for most tax transactions starting September 30, 2025. This transition is more than a procedural update—it represents a major shift in how individuals and businesses interact with the government financially.

The move toward electronic payments is designed to reduce operational costs, speed up processing, and curb the growing threat of fraud and lost or stolen checks. In recent years, check fraud has surged across the country, particularly impacting refund recipients and businesses with large tax liabilities.

This change impacts all taxpayers who send checks to the IRS—from individuals paying estimated taxes to businesses managing quarterly payroll deposits. It also affects those who receive refund checks, particularly those who have not yet enrolled in direct deposit.

For industries like agribusiness and construction, where traditional check-based payment systems are still common, this could require a significant adjustment. High-net-worth individuals and nonprofits that rely on delegated or third-party filing will also need to ensure their financial representatives are updated on this policy shift.

Recommended Steps to Prepare

With the deadline looming, it’s essential to evaluate your current systems and take action:

Enroll in IRS Direct Pay or EFTPS:
Individuals: IRS Direct Pay
Businesses: Electronic Federal Tax Payment System (EFTPS)

Set up Direct Deposit for Refunds:
Provide your bank account and routing number when filing tax returns to ensure timely refunds via ACH.

Evaluate Risk and Efficiency Gains:
Electronic transactions reduce the risk of check fraud and offer greater transparency in tracking payment status.

Train Teams & Advisors:
Ensure your internal accounting staff or third-party preparers are informed and equipped to transition your processes smoothly.

Looking Ahead

This transition is a proactive step toward a more secure and efficient tax administration system. At Larson Gross, we’re helping clients modernize their financial operations to stay ahead of regulatory changes and reduce friction in their compliance efforts.

If you’re unsure whether your current payment methods meet the new requirements—or need help establishing secure e-payment systems—our advisors are ready to guide you.