The IRS Is Going Paperless: What Taxpayers Need to Know

The Internal Revenue Service is in the middle of a major transition away from paper, affecting how taxpayers receive refunds, respond to notices, and communicate with the IRS. While filing a tax return hasn’t fundamentally changed, how the IRS processes information and issues refunds has.

Here’s what’s happening — and why it matters.

✅ Paper Tax Refund Checks Are Being Phased Out

Beginning September 30, 2025, the IRS started phasing out paper refund checks for individual taxpayers, as required by Executive Order 14247. The 2026 filing season (for 2025 tax returns) is the first season where most refunds are expected to be delivered electronically by default. [irs.gov]

What this means for taxpayers:

• Refunds are now expected to be issued by direct deposit or other electronic methods

• Paper checks are limited to narrow exceptions, such as hardship or lack of access to banking

• Electronic refunds are faster and more secure than mailed checks

The IRS reports that paper checks are over 16 times more likely to be lost, stolen, or delayed than electronic payments. [irs.gov]

⚠️ Refunds Can Be Delayed If Direct Deposit Info Is Missing

If a taxpayer files a return without valid bank account information, the IRS may pause the refund and send Notice CP53E, requesting electronic payment details. Taxpayers typically have 30 days to respond, or the refund may be delayed significantly. [taxesforexpats.com]

Recent reporting confirms that over a million taxpayers have experienced refund delays due to this transition, often because direct deposit information was missing or incorrect. [nextgov.com]

Best practice: Always include accurate routing and account numbers when filing.

✅ IRS Correspondence Is Largely Digital Now

As part of its Paperless Processing Initiative, the IRS now allows taxpayers to:

• Respond to many IRS notices online

• Submit supporting documentation digitally

• Access and manage tax information through an IRS Online Account

The IRS estimates that more than 94% of individual taxpayers no longer need to mail documents to the agency for most issues. [irs.gov]

Paper submissions are still accepted, but digital responses are faster and reduce processing delays.

✅ Paper Returns Are Still Allowed — But Digitized on Receipt

Taxpayers can still file paper tax returns if they choose. However, the IRS is now scanning and digitizing paper returns when they are received, rather than manually entering data. This is part of the agency’s broader modernization effort to reduce backlogs and speed up processing. [irs.gov]

That said, paper‑filed returns still take longer to process than e‑filed returns.

✅ IRS Direct File Is Gone for 2026

One point of confusion this year: although the IRS is going paperless, it has ended its Direct File program for the 2026 filing season. Taxpayers must now file through:

• IRS Free File partners (income‑eligible)

• Commercial tax software

• A tax professional. [nextgov.com]

Going paperless does not mean the IRS is offering a new free government filing system.

✅ What About Payments to the IRS?

The executive order also applies to payments made to the federal government, but the IRS has stated that checks and money orders are still accepted for now, while electronic options continue to expand. [taxesforexpats.com]

Electronic payment options include:

• IRS Direct Pay

• EFTPS

• IRS Online Account

• Debit or credit cards

What Taxpayers Should Do Now

To avoid delays and frustration:

• ✅ Use direct deposit for refunds

• ✅ Create an IRS Online Account

• ✅ File electronically whenever possible

• ✅ Double‑check banking information before filing

The IRS’s shift to paperless processing is meant to improve speed and security — but taxpayers who aren’t prepared may experience delays during the transition.