What taxpayers need to know about the IRS ending paper checks

ARTICLE | August 22, 2025

The Trump administration’s plan to halt the issuance of paper checks for tax refunds by the end of September 2025 has raised several concerns among tax and consumer advocates. As the deadline approaches, it’s crucial for millions of American taxpayers to understand the implications of this plan and how it may impact their future tax refunds.

Overview of the Plan

The U.S. Treasury Department, the IRS, and the Social Security Administration have announced a significant shift away from paper checks to an all-electronic system by September 30, 2025. This move, as per the executive order signed by President Trump, is designed to increase efficiency, minimize fraud, lower administrative costs, and expedite payments. However, the abrupt end to paper checks may cause confusion among taxpayers, particularly those who are unbanked or have limited access to digital facilities.

Challenges for the Unbanked Population

One major concern with the Trump plan to end paper tax refunds this year revolves around the unbanked population. According to the FDIC, millions of Americans do not have traditional bank accounts, with reasons ranging from lack of access, mistrust of banks, or high fees. This abrupt transition to an all-electronic system could leave these individuals without a viable means to receive their tax refunds or federal benefits. The government is exploring solutions such as issuing refunds on debit cards and encouraging financial institutions to offer low-fee or free accounts.

Impact on U.S. Citizens Abroad

Americans residing overseas may encounter challenges as the IRS typically requires a U.S.-based bank account for direct deposits. The details of how the government plans to address this issue remain unclear. However, expats are advised to plan ahead, possibly by setting up a U.S.-based bank account or utilizing financial services that provide U.S. banking solutions.

AICPA’s Recommendations

The American Institute of CPAs (AICPA) has raised concerns about potential problems associated with this transition. For instance, estate executors and trustees may face challenges due to mismatched account names or absence of direct deposit information on forms. The AICPA has recommended the government to provide extensions or exceptions for such scenarios and to provide more guidance on how to proceed in these situations.

The Role of Insero’s Accounting Services 

In the face of these changes, it’s crucial for taxpayers to seek professional guidance. Insero’s accounting services can help navigate the complexities of this transition. Our team of experts can provide advice on opening U.S.-based bank accounts, setting up direct deposits, and properly filing tax returns to ensure a smooth transition to the new system.

The Trump plan to end paper tax refunds this year represents a significant change in how federal payments are made. Despite the potential challenges, this move is likely to usher in a more efficient and secure era of transactions. However, for some taxpayers, this transition may require additional assistance. Insero’s accounting services stand ready to help, providing the necessary guidance and support to help taxpayers navigate this new landscape.