On March 25, 2025, President Trump signed Executive Order 14247, aiming to modernize how the federal government handles money. This order known as Modernizing Payments to and From America’s Bank Account addresses the high cost, inefficiency, and fraud risk associated with paper-based payments like checks and money orders.

Starting September 30, 2025, federal agencies (including the IRS) must stop issuing paper checks for benefits, tax refunds, vendor payments, and more. Instead, payments must be made through electronic methods such as direct deposit, digital wallets, prepaid accounts, and real-time transfers. Additionally, federal receipts, such as taxes, fees, fines, and loan payments, must also be submitted electronically wherever permitted by law. Physical lockboxes used for incoming payments will be phased out as agencies lean into digital collection methods.

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Limited Exceptions Will Be Available

The order recognizes that not everyone may have access to electronic systems. Limited exceptions which are under review by the Treasury include:

• Individuals without access to banking or electronic payment options
• Emergency payments where digital methods would cause undue hardship
• Transactions related to national security or law enforcement
• Other special circumstances identified by the Treasury

However, the IRS and Treasury have not yet finalized how these exceptions will work, underscoring the need for preparedness.

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What This Means for You

If you receive federal funds, whether tax refunds, Social Security, or other benefits, or make payments to the IRS (including estimated taxes), you must prepare to transition to electronic channels by September 30, 2025. Taxpayers should consider steps like:

• Setting up or updating your IRS Online Account
• Enrolling in systems like EFTPS or IRS Direct Pay
• Ensuring accurate and active banking or debit/credit payment information

Though the transition offers benefits, such as speed, security, and reliability, the lack of final guidance on exemptions and implementation details means it's wise not to wait.

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What We're Doing for You

At GatePass Capital, we're closely tracking updates from the Treasury and IRS to help you navigate this transition smoothly. Whether you’re a current client or not, we're ready to assist with:

• Understanding how this shift affects your tax payments or refunds
• Evaluating your current electronic payment setup
• Planning for year-end tax activities with these new requirements in mind

If you're not yet working with us, we encourage you to schedule a call to see how we can support you through the shift to electronic payments and optimize your tax planning approach.

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