Compliance
What All Taxpayers Need to Know About Modernizing Payments Under EO 14247
A sweeping executive order is transforming how the IRS and federal government handle incoming and outgoing payments—learn what’s changing now and how to stay ahead.
By NomadicTax Research Team • 5-8 min read • April 2, 2026
## Executive Order 14247: A Quick Primer
**Executive Order 14247: Modernizing Payments To and From America’s Bank Account** was signed on **March 25, 2025**. As of the **2026 filing season**, it’s shaping policy: federal payments (refunds, benefits, grants, vendor payments) and payments made to the government (taxes, penalties, fees) are being transitioned toward **electronic methods only**. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-frequently-asked-questions-about-executive-order-14247-modernizing-payments-to-and-from-americas-bank-account?utm_source=openai))
The IRS issued **Fact Sheet 2026-02** (via IR-2026-13) and FAQs to help stakeholders understand the shift. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-frequently-asked-questions-about-executive-order-14247-modernizing-payments-to-and-from-americas-bank-account?utm_source=openai))
## What’s Changing for Tax and Non-Tax Payments
| Purpose | Old Path | New Expectation |
|---------|----------|-----------------|
| Refunds | Paper check or direct deposit | **Direct deposit** strongly preferred; paper refunds largely phased out ([irs.gov](https://www.irs.gov/newsroom/irs-issues-frequently-asked-questions-about-executive-order-14247-modernizing-payments-to-and-from-americas-bank-account?utm_source=openai)) |
| Payments due (taxes, penalties) | Paper checks, money orders | **Electronic payment methods** will become standard, including EFTPS, Direct Pay, etc. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-frequently-asked-questions-about-executive-order-14247-modernizing-payments-to-and-from-americas-bank-account?utm_source=openai)) |
| Vendor & contractor payments | Paper-based in many cases | Moving toward electronic disbursements to speed up timing and reduce costs |
Limited exceptions apply: hardship situations or other legal, procedural obstacles may still allow non-electronic payments. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-frequently-asked-questions-about-executive-order-14247-modernizing-payments-to-and-from-americas-bank-account?utm_source=openai))
## Why This Matters To You
- **Speed & reliability**: Electronic payments generally process faster and with fewer errors.
- **Fraud prevention**: Paper checks are prone to theft or interception—electronic transfers are more secure.
- **Cost savings**: Reduced government handling costs hopefully translate to overall efficiency.
For you, this means: refunds arriving via bank account, viral adoption of electronic means when paying taxes, potentially safer interactions with IRS and other agencies.
## Action Steps for Individuals and Businesses
- Ensure bank account & routing number in IRS profile(s) are up to date.
- Opt for **direct deposit** for refunds wherever possible.
- Use electronic payment tools when paying taxes: IRS Direct Pay, EFTPS, or approved e-payment channels.
- For those without bank accounts or facing hardship, check whether you qualify for an exception. Contact IRS in advance if paper is your only option.
## Example
**Person A** is a gig worker who historically got paper checks for tax refunds. In 2026, they should provide direct deposit information when they file. If they don’t, the IRS is likely to insist on electronic methods unless hardship is demonstrated.
**Business B** regularly sends paper checks for payroll tax deposits. Under EO 14247 and related IRS guidance, Business B would need to convert to electronic payments using EFTPS or the payment system assigned by the IRS.
## Risks & Compliance Notes
- Using outdated or wrong bank info can delay refunds or payments.
- Non-electronic submissions that once were accepted may now be rejected or penalized.
- Always retain receipts or confirmation numbers for electronic payments—these can be crucial if discrepancies arise.
EO 14247 reflects a major federal push toward digital modernization—and if you stay ahead of the curve, you’ll avoid surprises and increase certainty in your tax affairs.