Did federal agencies pay taxes
Executive summary
Federal agencies, led by Treasury and the IRS, are moving to stop paper checks for most tax-related disbursements and receipts by September 30, 2025, under Executive Order 14247; the IRS will phase out paper tax refund checks and shift collections to electronic systems [1] [2]. Agencies will continue some exceptions for people without banking access, and guidance and implementation details remain in process with agency compliance plans and Treasury reports referenced but not fully published in the available sources [3] [4].
1. What changed: a government-wide push to go paperless
President Trump’s Executive Order 14247 directs the Treasury, in coordination with the IRS and other federal agencies, to transition federal payments and receipts to electronic transfers and to phase out paper checks for disbursements — a policy the IRS says includes phasing out paper tax refund checks beginning Sept. 30, 2025 [1]. Treasury guidance and industry write-ups summarize the order as requiring agencies to stop issuing most paper checks after that date and to process payments electronically “as soon as practicable” [5] [1].
2. How the IRS will be affected: refunds and receipts go digital
The IRS explicitly states it will align with the executive order and transition to fully electronic federal payments, including phasing out paper tax refund checks; the agency says direct deposit avoids returned or stolen checks and that taxpayers will still file as before but receive refunds differently [1]. Treasury targets raising electronic rates for IRS individual tax refunds to about 80.7% by the end of FY2025 and increasing electronic tax receipt rates — part of the measurable goals cited in Treasury bulletin guidance [2].
3. Exceptions, accommodations and open questions
Multiple sources note the order allows limited exceptions, for example for individuals who lack access to banking services or electronic payment systems; firms and law firms advising clients emphasize that exemptions are written into the order and that Treasury and agencies must submit implementation plans and reports describing details [3] [4]. Those implementation reports and some agency compliance plans were required by deadlines in 2025, but the available items here show those documents were still pending public release or not fully detailed in the sources [3].
4. What this means for taxpayers: practical impacts
Taxpayers who already use direct deposit are largely unaffected in mechanism but will no longer receive paper refund checks; the IRS notes a high share of filers already provide direct-deposit information — one estimate put direct-deposit filings at about 94% for the 2025 filing season — but sources caution that some taxpayers lack bank accounts or are reluctant to share banking information with the IRS, so planning for alternatives and enrollment in electronic-payment systems is advised [6] [1] [3].
5. Compliance timeline and agency targets
Treasury’s bulletin and supporting materials set numeric goals to increase electronic disbursements — for example, raising non-tax Treasury-disbursed electronic payments to 98.4% and IRS individual refund electronic rates to 80.7% by end of FY2025 — and reiterate the Sept. 30, 2025 effective milestone for the broad shift away from checks [2]. Private-sector advisories and accounting firms uniformly recommend preparing to make tax payments electronically and to provide banking information on returns filed after the cutoff to avoid delays [7] [8] [9].
6. Debate and hidden incentives: efficiency vs. access
Advocates frame the order as reducing fraud, cost and delay from checks and improving payment security [1] [2]. Critics and some practitioners flag equity and privacy trade-offs: forcing electronic-only payments could disadvantage unbanked individuals or those wary of sharing bank details, and Treasury’s need to craft accommodations creates potential tension between efficiency goals and access obligations [6] [3] [4].
7. What’s not in the available reporting
Current sources do not publish the full Treasury implementation report or detailed agency-by-agency compliance plans showing exactly how exceptions will be handled in practice, nor do they provide exhaustive operational guidance on penalties, transition penalties, or step-by-step recourse for taxpayers who cannot provide bank information; those materials “were required” but are not present in the collected excerpts here [3] [4].
Conclusion — what to do now
If you file or advise taxpayers: assume the government will stop issuing and (in many cases) stop accepting paper checks after Sept. 30, 2025; enroll in EFTPS, IRS Direct Pay or provide direct-deposit information when filing to avoid delays; watch for the Treasury implementation report and IRS guidance for specifics on exceptions and enrollment procedures [1] [2] [9]. Available sources do not mention the detailed, final procedures for those exceptions beyond the order’s requirement that they exist [4].