AICPA submits recommendations for transition to EFDS

The American Institute of CPAs (AICPA) has submitted recommendations to the Department of the Treasury concerning the transition to an electronic federal disbursements system (EFDS), as mandated by Executive Order 14247, Modernizing Payments To and From America’s Bank Accounts.

The order stipulates that all federal payments should be processed electronically by ceasing issuance of paper checks by 30 September 2025 and aims to enhance efficiency and security while reducing costs.

The AICPA supports the move towards electronic payments but highlights the challenges it poses, particularly for taxpayers without a US bank account.

This includes seniors and the unbanked population, who may be excluded from the system due to international banking regulations that restrict automated clearing house transfers with non-US financial institutions.

The AICPA's letter references a Treasury Inspector General for Tax Administration report indicating that nearly seven million taxpayers received refunds through non-electronic means in the latest tax year.

The AICPA's recommendations include exceptions for individuals and entities not based in the US or without a US bank account, and exemptions for temporary non-US individuals.

It also suggests expanding the capabilities of the Electronic Federal Tax Payment System to allow business accounts to process payments on behalf of individuals, and delaying the implementation for trusts and estates until the IRS can address specific administrative issues.

Furthermore, the AICPA proposes guidance for applying exceptions for qualified taxpayers, extending the timeframe for implementing the order, seeking statutory authority for the mandates, and involving stakeholders in establishing the rules for the transition.

AICPA senior manager for Tax Policy & Advocacy Daniel Hauffe said: “For many years, the AICPA has advocated for and supported the modernisation of the IRS and its payment systems; although this executive order is a step in the right direction, there are many considerations before implementing changes, which means updated processes and carefully tailored rules will need to be developed.”

“The AICPA’s recommendations allow for the modernisation of the IRS’ tax payment systems while mitigating the impact of the administrative burden on taxpayers, tax practitioners and the IRS, that could be caused by this executive order.”

In June 2025, the AICPA also expressed concerns regarding the pass-through entity tax state and local tax (SALT) deductions in recent reconciliation bills.

"AICPA submits recommendations for transition to EFDS" was originally created and published by The Accountant, a GlobalData owned brand.

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