Paper’s Out: The IRS Goes Fully Digital for Refunds

Ready or not, the end has come for looking forward to that tax refund in the mail.

Along with the U.S. penny, paper tax refund checks will soon be a thing of the past. Since the 19th century, the Federal Reserve has made payments by paper, slowly developing a more streamlined process between banks, people, and the U.S. Treasury. On Sept. 30, the Internal Revenue Service (IRS) concluded its use of paper for payments and refunds to taxpayers.

Although an Executive Order from the White House hastened the end of the paper trail, the use of checks in the U.S. began to decline with the rise of credit and debit cards in the 1990s. Not only are checks easy to lose or steal, but scams like check washing make any check a target of scammers. According to the U.S. Postal Inspection Service, more than $1 billion in counterfeit checks are confiscated each year.

In recent years, the IRS has worked to reduce the number of paper tax returns it receives. Like paper checks, paper tax returns are cumbersome and require more time to process. With paper refund checks now phased out, the IRS is beginning its transition to electronic payments for individual taxpayers. Here’s what to know about the change:

• The use of paper tax refund checks by the IRS ended on September 30, 2025.
• At present, the IRS is planning to provide guidance ahead of the 2026 tax season. In the meantime, taxpayers can use existing methods of filing their tax returns, including paying with a paper check. However, the IRS may soon eliminate the option to pay taxes by paper.
• While a majority of taxpayers receive their tax refunds through direct deposit, the IRS issued paper checks to approximately 7% of filers in 2025. Those without bank accounts are encouraged to open one through a local bank or credit union. For receiving payments, digital wallets and prepaid credit cards are also options.
• There will also be limited exceptions to accommodate those without accounts, emergency circumstances, law enforcement matters and other situations as determined by the Treasury secretary.
• Overall, the move away from paper is expected to reduce costs, speed up processing and protect taxpayers and institutions from tax fraud if checks fall into the wrong hands.

Paper checks are history. As refunds and payments move fully online, scammers will keep evolving in their search for new ways to commit tax fraud.

Concerned about what the IRS can do with advanced technology?

As the IRS enhances its technology, enforcement efforts become more precise. Those involved in payroll tax diversion or other tax schemes should consult experienced counsel immediately.

The attorneys at Robert J. Fedor, Esq., L.L.C., provide guidance to resolve compliance matters and reduce exposure to criminal penalties. We serve clients across the U.S. and internationally from our offices in Cleveland and Chicago. Call 440-250-9709 to arrange a consultation.

Not sure what to expect if you are already under scrutiny? Download our free, "Understanding Tax Fraud" ebook for insights into warning signs and potential legal defenses.