Understanding Treasury’s Request for Information on Modernizing Federal Payments
As tax professionals, staying abreast of changes in federal payment mechanisms is crucial, especially as the U.S. Department of the Treasury (Treasury) moves towards a fully digitized payment landscape. This article details a significant Request for Information (RFI) issued by the Treasury, inviting public input on the implementation of Executive Order (E.O.) 14247, "Modernizing Payments To and From America’s Bank Account". Understanding this RFI is vital for advising clients, particularly given its direct implications for receiving federal disbursements such as tax refunds.
Authority and Rationale for the Request
The impetus for this RFI stems directly from President’s Executive Order (E.O.) 14247, "Modernizing Payments To and From America’s Bank Account," issued on March 25, 2025. This E.O. mandates a transition to electronic payments for all Federal disbursements and receipts, including tax refunds, by digitizing payments to the extent permissible under applicable law. Effective September 30, 2025, the Federal Government is directed to cease issuing paper checks for all Federal disbursements, with limited exceptions as specified in the E.O..
The primary goals behind this sweeping modernization effort are multifaceted and address significant challenges associated with paper-based transactions:
- Defending against financial fraud and improper payments. Treasury checks are statistically 16 times more likely to be reported lost or stolen, returned undeliverable, or altered compared to Electronic Funds Transfers (EFT). The banking sector reported approximately 680,000 instances of check fraud in 2022 alone, nearly double the figures from 2021.
- Increasing efficiency and reducing costs. The E.O. highlights that the continued reliance on paper payments leads to unnecessary costs, delays, and inefficiencies. For example, maintaining the physical infrastructure and specialized technology for digitizing paper records incurred over $657 million in costs for American taxpayers in Fiscal Year 2024.
- Enhancing the security of Federal payments. Mail theft complaints have notably risen since the COVID-19 pandemic, further emphasizing the security vulnerabilities of paper checks. Digital payments are inherently less susceptible to these issues.
In light of these objectives, the E.O. specifically directs the Treasury to develop and implement a comprehensive public awareness campaign to inform federal payment recipients about the transition to electronic payments. This campaign is intended to provide guidance on assessing and setting up digital payment options, with a particular focus on ensuring that unbanked and underbanked populations are included in this transition. The RFI serves as the Treasury’s mechanism for inviting public input to inform these critical implementation efforts.
Areas for Public Input
The Treasury’s RFI seeks comprehensive feedback on various aspects of implementing E.O. 14247. Interested parties, including tax professionals and their organizations, are invited to respond to any or all of the questions outlined in the notice. The RFI is structured into four main categories:
A. Paper Check Usage for Government Collections and Disbursements This section aims to understand the current landscape and challenges associated with the transition:
- Factors influencing continued paper check use for receiving or making payments to the Federal Government.
- Barriers to transitioning individuals and organizations to EFT options, including specific barriers for:
- Unbanked and underserved individuals.
- Individuals with bank accounts or small businesses.
- Identification of instances where Federal agencies do not currently provide EFT options or where EFT information is not readily available.
- Consideration of alternatives to EFT payments for limited cases where electronic methods are not feasible.
- Analysis of successful campaigns in the private sector or other areas that transitioned individuals from paper checks to EFT, including reasons for their success and recommended strategies for Treasury.
B. Public Awareness Campaign and Stakeholder Outreach Given the E.O.’s directive for a public awareness campaign, Treasury is seeking input on its design and execution:
- Content and necessary support/tools for a public awareness campaign to facilitate the transition to EFT options for Federal payments.
- Identification of the most effective communication channels for Federal agencies to reach program participants and other payees.
- Suggestions for external entities or organizations (private or nonprofit) that Federal agencies should partner with to increase awareness.
- Identification of the best communication channels for the Federal Government to gather information from individuals currently relying on paper checks.
- Recommendations on how Federal agencies should inform the public about different EFT payment options.
C. Preferred EFT Methods This section delves into specific electronic payment options and their suitability:
- Identification of electronic payment methods typically used by the general public, unbanked individuals, and those relying on paper checks for making or receiving payments, along with reasons for their choice.
- Recommendations on which EFT options the Federal Government should offer for incoming and outgoing payments, including direct deposit, debit/credit card payments, prepaid card accounts (like Direct Express), digital wallets, and real-time payment systems.
- Discussion of potential risks or considerations related to offering certain EFT methods.
- Identification of administrative, regulatory, or statutory barriers to offering certain types of EFT methods.
- Strategies for the government to prevent fraud and ensure secure payments using these EFT options.
- Suggestions for organizations or partnerships that could provide EFT payment access for individuals or businesses without bank accounts.
- Identification of additional financial products or services available to facilitate EFT methods not explicitly listed in the E.O..
D. General Comments Related to the E.O. “Modernizing Payments To and From America’s Bank Account” This open-ended section invites any other issues or considerations related to the implementation of E.O. 14247 that commenters wish to raise.
How to Respond and Key Deadlines
Tax professionals, their firms, and related industry organizations are strongly encouraged to provide their insights to the Treasury. All comments are considered public and will be posted online once reviewed by the Treasury Department. Therefore, it is crucial not to submit any information considered confidential or inappropriate for public disclosure.
Comments should be submitted electronically through the Federal eRulemaking Portal:
- The general portal is https://www.regulations.gov.
- The specific docket for this RFI is https://www.regulations.gov/docket/TREAS-DO-2025-0004.
- Commenters have the option to attach their comments as a file and/or attach supporting documents.
The deadline for submitting written comments and information is June 30, 2025. For any further inquiries, individuals may contact Tyler Curtis, Director, Office of Consumer Policy, at (202)-717-3754 or christopher.curtis2@treasury.gov, or Nora Esposito, Senior Advisor, Office of Consumer Policy, at (202)-604-9307 or nora.esposito@treasury.gov.
The Treasury’s initiative to modernize federal payments represents a significant shift with widespread implications, including for the issuance of tax refunds. As tax professionals, our collective input can help shape a more efficient, secure, and accessible payment system for all taxpayers.
Prepared with the assistance of NotebookLM.