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On March 25, 2025, the President of the United States signed Executive Order #14249 titled Protecting America’s Bank Account Against Fraud, Waste, and Abuse, which was published in the Federal Register on March 28.
The fact sheet states that, effective September 30, 2025, the Federal government will cease issuing paper checks for all disbursements, including intragovernmental payments, benefits, vendor payments, and tax refunds.
The fact sheet also states payments made to the Federal government, such as fees, fines, loans, and taxes, must also be processed electronically where permissible under existing law.
You can read the full Executive Order as it appears in the Federal Register here and the White House Fact Sheet which summarizes the Executive Order here.
If you are still writing paper checks to pay your estimated tax payments or the balance due then you may want to switch over to electronic payments sooner rather than later to avoid the learning curve.
I was stationed in Germany in 1973 and the first half of ’74 in a maintenance company for the Army’s Third Armored Division. When my company XO was promoted to CO, I was his personal clerk and driver for a while. The standard process to pay enlisted troops on our base was that once a month the XO, his driver and a appropriate armed detail would go to a nearby Kaserne where we received and counted the cash to pay everyone who did not have direct deposit which I would guess to be 90%+ of the enlisted men in our company of about 200 men (we had no women assigned to our company).
When we returned to our base we then divided the cash into the amount each man would receive. At that point usually mid-morning the company would fall into formation. After announcements those with direct deposit would be dismissed to go to their assigned duty post and then the XO and his clerk would pay those without direct deposit, man by man. I would count the money out and then the payee would also count the money and then sign their paper check to acknowledge payment in full as the XO supervised. The XO and I hated payday. When the XO was promoted he did something about this procedure.
On the first payday after his promotion to CO we had our normal formation but then things changed. No one was dismissed and the entire company walked (marching would not describe this) to the Kaserne at Erlensee from the Fliegerhorst Kaserne at Hanua a distance of about 7Km a little over 4 miles. We paid the men without direct deposit at Erlensee, and then the entire company walked back to Fliegerhorst. When we arrived back near the end of the day, we had another formation and my CO announced that he hoped everyone had enjoyed the day and noted that we would be following the same process every month until at least 90% of the company had elected direct deposit.
We did not have to make the walk again as most everyone had elected to have direct deposit by the next payday. My CO had found the right incentive. Yes, the CO and I also walked.
So, what motivates you best, the carrot or the stick?
Thanks for the heads-up. I can manage this just fine for my personal stuff. However, there is a small family trust I am trustee of, and this will be more difficult for this. It is with one of the major low-cost brokerage firms. They have rules like you can’t write a check for less than $250, and it is sheer hell trying to get a bank account linked because so many people have to get notarized signatures. How I’m ever going to get a payment to the government, I have no idea. I guess I need to be looking into this.
Great point about possible headaches making required payments related to IRS form 1041 in 2025. Currently, there are direct pay options from a bank account for many individual and business taxes but I do not see form 1041 listed on the kinds of payments that direct pay accepts for either individuals or businesses.
Unless direct pay is expanded to include 1041 payments or an exception to new payment requirements is carved out for paying 1041 taxes electronically, then you may be forced to make electronic deposits of tax on behalf of your trust by registering for and using the Electronic Federal Tax Payment System (EFTPS). Alternatively, if you use a paid preparer to electronically file your 1041 you may want to inquire if the tax software they use allows them to schedule electronic payments for the trust when they transmit the 1041 return.
I prefer electronic debits and credits, as well as digital coupons at the grocery store, but these things are beyond the skill set of many old folks as well as a good number of young people. I hope the less savvy among us can be accommodated.
I’ll take the carrot! Enjoyed the story!
Good to know! Interesting that the EO included the statement “This Executive Order does not establish a Central Bank Digital Currency (CBDC).” (glad to hear that.)
I recently set up an account on IRS.gov to make estimated tax payments (until I have to start RMDs) and get an IP PIN.
I saw that CBDC comment too. I know congress passed and the President signed a new law in March 2025 that blocks DeFi required reporting by the decentralized crypto exchanges.
My understanding is tax law still currently requires brokerage, but not DeFi, reporting of digital asset sales to begin in tax year 2025 with a new form 1099-DA to be sent out in early 2026 but the brokerage reporting of tax basis and character of the gain/loss to begin in tax year 2026 and that information will go out in early 2027.
What a mess. I would prefer for all entities to fully report or no entities to report.
Regardless of whether a third party has an obligation to report to you, and the government, the burden of reporting crypto transactions is still on the taxpayer to report those taxable events on their own 1040.
Making it harder to receive complete tax information in a organized manner increases the time and cost of tax compliance burden on all taxpayers with crypto investments. When the page one question on your 1040 regarding digital assets is answered yes both tax taxpayer and their preparer should expect extra work to comply with the reporting obligations.
I admit my thinking about cryptocurrency has been negatively influenced by the late Charlie Munger’s comments.
Wonderful. There are still people who don’t use computers or smart phones. There are probably people who don’t want to give the government their banking information. I wouldn’t have said I’m a conspiracy theorist, but the consolidation of government data going on right now is worrying. Last year I asked the IRS to deposit my refund in my bank account but they sent me a check instead. They also sent a letter saying this was because my return required “extra processing”.
Great story, BTW, I imagine there was a lot of peer pressure.
Often 1040 tax clients who still pay by check will provide preparers with copies / pdf’s of the check before they mail the payment when they provide the preparer their information. I had one client who on the written dollar amount line that instead of “…& no hundreds” would instead write “and not a D** penny more”. The check was still deposited by the IRS.
I would guess your “extra processing” might mean you were getting a substantial refund because something on your return was large compared with the average for the item such as a huge medical expense deduction. If so your refund may include a small amount of interest which is taxable income in the year paid to you and the IRS, like anyone else, only issues you a 1099-Int if the amount is $10 or more. Still taxable 1099 or not.
Yes, all of my tax for that year was refunded. I was deducting my share of the entry fees for my CCRC for that year, which came to about twice as much as I planned for.
Such a memorable story!
For me, it’s the carrot. The carrot can be just the reward of having completed something fully, well, or ahead of deadline. I’ll be surprised if Humble Dollar readers — many of whom I would suppose are great planners — are motivated by the stick.
Agree, but sort of similar to disliking investment losses more than liking investment gains, it usually only takes the one bad experience where a mailed ES payment or balance due payment is lost or deemed paid late for a taxpayer to be motivated to change to from paper to electronic payments.
Thanks for this important information, Bill, and I loved your story. Chris
I think my CO got a lot of support from the non commissioned officers (NCO “the sergeants”) who were the main enlisted men who were mostly already using direct deposit. The NCO’s did not like wasting a day.
Bill, that’s a great story. You had an inventive CO.
We frequently have clients at VITA & TaxAide who transition to retirement and start receiving income that requires estimated taxes. Many are surprised and confused, never having made estimated payments before. We help them understand the process, and print out quarterly payment vouchers. It will be interesting to see how the tax return process and training will adapt to this. Does this mean that all tax due payments must be electronic as well? We still get the odd few who want to send in a check on April 15!
The payment to the government is not currently a hard date but rather “as soon as practicable” as I understand the current law.