IRS to Eliminate Paper Refund Checks
May 15, 2025
The Internal Revenue Service will discontinue the issuance of paper refund checks effective Sept. 30, 2025.
This policy change will directly impact non-U.S. persons receiving tax refunds related to the disposition of U.S. real property interests, according to Kat Rodgers of Foreign Tax CPA.
All tax refunds will be issued electronically and directly deposited only to U.S. bank accounts.
This change applies to:
- Refunds from Form 8288-A & Withholding Certificates
- Refunds from Form 1040NR and Form 1120-F tax returns
- Paper checks will no longer be available, even upon request
- The IRS will not deposit refunds into foreign accounts, nor will it remit funds by international wire
As an international CPA firm representing non-U.S. sellers, Rodgers said her firm advises stakeholders—including legal counsel, title companies and foreign clients—to prepare for this transition now:
- Establish a U.S. bank account early in the transaction process
- Where that is not feasible, explore the use of a qualified intermediary or escrow agent with refund disbursement capabilities
- Communicate this update clearly to foreign sellers closing in late 2025 or thereafter to avoid refund delays
This change underscores the IRS's shift toward full electronic payment systems and heightened fraud prevention protocols.
Contact ALTA at 202-296-3671 or [email protected].