On March 25, 2025, President Donald Trump issued Executive Order 14247, mandating that all federal payments — including tax payments to the IRS — be made via electronic funds transfer (EFT). This directive is part of a broader initiative to modernize government payment systems and reduce reliance on paper checks.
Key dates
- Sept. 30, 2025: The IRS is mandated to cease issuing paper checks.
- As soon as practicable: All payments to the federal government — including tax payments by trusts and estates to the IRS — shall be processed electronically.
Impact on trusts and estates
Currently, trusts and estates cannot use IRS Direct Pay, which is available to individual taxpayers. In addition, Form 1041 does not include fields for inclusion of banking information. As a result, the two options for trusts and estates will be wiring funds to the IRS from their financial institution or the Electronic Federal Tax Payment System (EFTPS).
Neither of these options is ideal, and both require advance planning. In addition to the cost often associated with wiring funds, taxpayers wiring payments to the IRS must complete an associated worksheet for submission to the financial institution, and the financial institution must comply with guidance in the “Electronic Federal Tax Payment System Financial Institution Handbook” or risk the payment being rejected by the Fedwire system. The EFTPS requires advance planning to complete the enrollment and verification requirements which involves a verification PIN number issued by mail.
Grant Thornton Insight:
This issue may be further exacerbated for estates and trusts utilizing overseas accounts as the EO 14247 mandate goes into effect prior to the complete rollout and adoption of ISO 20022 as it pertains to cross-borders payments. The combination of these factors may lead to increased delays and failed payments through current channels.
The IRS’s current electronic refund and payment system requires the name on the tax return and on the bank account to match to complete the requested transaction. However, estates regularly remit tax payments or obtain refunds related to a decedent’s final return. Without revision or relief, these types of transactions by estates on behalf a decedent will no longer be possible.
These difficulties have not gone unnoticed by practitioners, and the AICPA has formally requested that the IRS:
- Exempt trusts and estates from the executive order’s requirements until Form 1041 is updated to support electronic payment fields
- Allow use of IRS Direct Pay for trusts and estates to simplify compliance and reduce administrative burden
To date, no formal announcement has been made regarding an extension of the Sept. 30, 2025, deadline or the other requested relief. In fact, the Treasury has consistently emphasized its commitment to the timeline in press releases and in comments from the acting Commissioner. Trustees and administrators of trusts and estates should prepare to use EFTPS for all future tax payments and discuss with their financial institution the option of wiring funds to the IRS in case they are unable to complete the registration before their next required tax payment.1
Grant Thornton Insight:
Trustees and administrators should register for EFTPS as soon as possible. Because of the mailed PIN verification, the process cannot be completed on the same day payments are due. The IRS estimates that an enrolling entity will receive the PIN via mail in five to seven days. However, feedback from our clients indicates that processing can take significantly longer, or the PIN letter may not be issued. In these cases, it may be necessary to restart the enrollment process.
1 We continue to monitor this issue and will provide additional updates on any changes to the payment options for trust and estates, especially a decision by the Treasury to expand the Direct Pay option to these taxpayers.
Contacts:
Partner, Private Wealth Services
Grant Thornton Advisors LLC
Aaron Borden leads Grant Thornton’s Private Wealth Services practice in Dallas. Aaron has 20 years of experience finding solutions to complex tax problems for entrepreneurs, business owners, and family offices.
Managing Director, Washington National Tax Office, Grant Thornton Advisors LLC
William E. “Buck” Buchanan is the lead IRS Practice and Procedure subject matter expert in the Washington National Tax Office (WNTO).
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