Global Mobility Tax

United States | IRS issues additional guidance on Executive Order 14247, Modernizing Payments To and From America’s Bank Account

Summary

The IRS has released Fact Sheet 2026-02, providing updated Frequently Asked Questions (FAQs) regarding the implementation of Executive Order 14247, Modernizing Payments To and From America’s Bank Account.  The Executive Order directs the transition to fully electronic federal payments both to and from the IRS, aiming to reduce fraud, increase efficiency, lower costs, and enhance security. From a mobility perspective, this will affect programs that have traditionally relied on paper refund checks from the IRS to complete the tax settlement process.

The detail

In accordance with the Executive Order, the Department of the Treasury and the Internal Revenue Service began phasing out paper tax refund checks and other disbursements on September 30, 2025.  Paper refund checks to individual taxpayers have generally been discontinued, except in limited exception cases requiring certified payments or when no electronic alternative exists.  Tax return filing processes remain unchanged; only refund delivery and payment methods are transitioning to electronic formats.

Some key highlights include:

• Tax returns submitted without direct deposit information may experience longer refund processing times as the IRS will consider the return as having missing information. In such cases, taxpayers will receive a CP53E notice by mail requesting bank account details or an explanation for the absence of such information.  Recipients are requested to respond within 30 days via the IRS Individual Online Account to avoid refund delays.  Taxpayers may also respond in writing.  Direct deposit refunds will be issued promptly once the response is received if direct deposit information is provided.  If not, paper refund checks will be issued after six weeks.
• Currently, the IRS continues to accept mailed payments, including cash, checks, and money orders. However, there is an ongoing transition toward exclusive use of electronic payment methods, with limited exceptions for hardship cases.  Available electronic payment options include ACH direct debit, electronic funds transfer, IRS Direct Pay, and prepaid debit cards, which provide faster and more secure processing.
• International taxpayers should maintain use of existing methods for filing returns, including maintaining US bank accounts until all tax filings are completed. The IRS is actively working on developing secure alternatives, including partnerships with international providers, to facilitate timely access to refunds abroad.  Please note that the IRS has not defined “international taxpayer” so we await clarification on who will qualify for that status.

Why this matters

Mobility managers should encourage their taxpayers to firstly register for an online IRS account through id.me and regularly check IRS.gov within that portal for the status of any federal income tax refunds and any notices.  To prevent delays in refund processing, it is important to provide accurate direct deposit information when filing tax returns.  If direct deposit is not available, please expect delays in the receipt of paper refund checks.

Other changes impacting the tax return filing process

The United States Postal Service has updated its postmarking process so that the official mailing date used for time-sensitive documents—such as tax filings or payments submitted to the Internal Revenue Service—is based on when the item is processed through USPS mail processing equipment, not necessarily when it is dropped off at a retail counter or placed in a collection box. In practice, this means the postmark (or other USPS tracking or processing scan) may reflect a later date if the mail is not entered into the processing stream the same day it is deposited, which can affect compliance with filing or payment deadlines that rely on the “timely mailed, timely filed” rule. To ensure deadline protection, mailers of paper returns and/or paper checks are encouraged to use services that provide an acceptance scan (such as retail counter service or certified mail) that clearly documents the date the USPS took custody of the item.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Julie Baron
Partner

David Austin 
Partner

Mike Branca  
Partner

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