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October 02.2025

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Navigating the IRS Transition Away from Paper Checks: Protecting Vulnerable Taxpayers

NTA Blog graphic representing IRS phases out paper checks announcement

Understanding the Shift: How Executive Order 14247 Changes Tax Payments

The IRS is embarking on a monumental transition as it phases out paper checks, prompted by Executive Order 14247, which mandates all federal payments be made electronically by October 1, 2025. While approximately 94% of taxpayers already utilize direct deposit, the shift poses challenges for vulnerable taxpayer groups, such as the unbanked, disabled, and those with deeply held religious beliefs. Recognizing these challenges is pivotal for equitable implementation.

The Risks of Relying on Paper Checks

Paper checks, often referred to as the IRS’s “kryptonite,” carry significant risks, including loss and fraud, making them less efficient than electronic payments. In fact, they are sixteen times more likely to encounter issues like theft or alterations. The IRS aims to alleviate these complications while enhancing the security of taxpayer refunds through this transition.

Ensuring Fairness in Electronic Payment Implementation

As the IRS navigates this shift, it is crucial that safeguards are enacted to protect vulnerable populations. Exceptions are expected to be granted for groups like unbanked households, who account for about 4.2% of U.S. homes according to recent reports. For many without bank accounts, paper checks serve not just as a preference but as a crucial means of receiving funds. Additionally, taxpayers facing challenges due to disabilities or living abroad need special considerations to maintain their access to refunds without undue hardship.

Communicating Changes to Taxpayers

To avoid confusion, it is critical that the IRS develops a robust communications strategy. Millions of Americans depend on their tax refunds for essential living expenses, and understanding the implications of this new policy will help prevent unnecessary delays in obtaining funds. Taxpayers who do not provide direct deposit information may experience hold times before receiving paper checks, raising the importance of timely communication and education around the new regulations.

Conclusion: Advocating for Inclusion

The move towards a fully electronic payment system offers a promising future in efficiency and security, but as we embrace modernization, we must not leave the most vulnerable behind. The IRS should ensure that the transition to a paperless environment includes thorough communication of necessary accommodations for those who rely on paper checks. With thoughtful implementation and robust advocacy, the benefits of electronic payments can be shared widely, fostering trust in a modernized tax system.

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Navigating the IRS Transition Away from Paper Checks: Protecting Vulnerable Taxpayers

Understanding the Shift: How Executive Order 14247 Changes Tax Payments

The Risks of Relying on Paper Checks

Ensuring Fairness in Electronic Payment Implementation

Communicating Changes to Taxpayers

Conclusion: Advocating for Inclusion

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