Recently, President Donald Trump signed an executive order urging the federal government to gradually eliminate the use of paper checks in favor of electronic payments by September 30, with some specific exceptions.
The U.S. Treasury has approximately six months to discontinue paper checks for various payments, including tax refunds and Social Security benefits.
According to the White House, the goal of the Trump administration is to “modernize the government’s financial handling by transitioning from outdated paper-based payments to swift and secure electronic transactions.”
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This means that all federal departments and agencies are required to make disbursements through electronic funds transfer (EFT) options, such as direct deposits, debit or credit card transactions, digital wallets, and real-time transfers.
Payments due to the federal government, including taxes, fees, penalties, and loans, will also need to be processed electronically, with certain exceptions in place.
As mentioned, exceptions will cater to individuals lacking access to banking services and specific urgent circumstances, like emergency disbursements. Treasury Secretary Scott Bessent is tasked with presenting an implementation strategy for these changes within 180 days, as outlined in Trump’s directive.
“Paper-based payments, such as checks and money orders, create unnecessary expenses, delays, and risks related to fraud, lost payments, theft, and inefficiencies,” stated the White House order issued on March 25. “Digital payments offer a more efficient, lower-cost, and less fraud-prone solution.”
So, what does this mean for you? Here’s what you should know.
The End of Social Security Checks?
With the Treasury’s decision to eliminate paper checks for Social Security payments, beneficiaries currently receiving checks must shift to electronic payment options like direct deposits or prepaid debit cards. Research indicates that over 450,000 individuals still obtain their Social Security benefits via paper checks.
- This shift could pose challenges, especially for older adults who may be less adept with digital banking tools.
- At-risk populations, including those with limited internet access, might also struggle to adapt to the new system.
- Nevertheless, the order allows for the creation of a process to address circumstances that may cause undue hardship.
Moreover, this transition could overwhelm Social Security Administration resources as recipients seek help in updating their payment information.
Many individuals unable to make changes online may require personal assistance, which could be difficult given the recent cuts to the federal agency, including the closure of several local Social Security offices.
It remains to be seen how this order will be executed and what types of safeguards will be instituted to address these and other potential issues.
Addressing Mail Theft
Notably, the Trump administration’s initiative to eliminate paper checks comes amid a rise in mail theft incidents victimizing taxpayers in recent years.
Kiplinger reported that last summer, two former postal workers were charged with theft of over $4 million in U.S. Treasury checks at John F. Kennedy International Airport from June 2021 to August 2023. These checks included Social Security benefits, pandemic stimulus payments, and tax refunds.
Instances of mail theft like these are merely the beginning.
Both the FBI and the United States Postal Inspection Service (USPIS) have warned that check fraud is on the rise, particularly as a result of mail theft. Reports of fraudsters have nearly doubled from 2021 to 2023, impacting businesses, consumers, and government entities alike.
The top five reasons you may fall victim to mail theft include:
1. Checks left in residential mailboxes overnight
2. Checks deposited in blue collection boxes after the final pickup
3. Break-ins at USPS facilities
4. Robbery of postal service employees
5. Collusion and bribery involving USPS employees
The severity of mail theft: According to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), mail theft-related check fraud reached over $688 million between February 2023 and August 2023.
FinCen’s analysis of the 15,417 reports concerning check fraud revealed several outcomes. Approximately 44% of stolen checks were altered and deposited, 26% served as templates for counterfeit checks, and 20% were fraudulently signed and deposited.
Legislative Action Against Mail Fraud
Recently, several bipartisan initiatives aimed at protecting taxpayer rights and refunds moved forward in Congress.
Kiplinger reported that one piece of legislation specifically seeks to mitigate the risk of IRS tax refund mail theft by enabling taxpayers to request direct deposit if their check is stolen.
Congresswoman Nicole Malliotakis (R-NY) introduced a bipartisan initiative, the Recovery of Stolen Checks Act, in collaboration with Reps. David Kustoff (R-TN) and Terri Sewell (D-AL).
“Many of my constituents are hardworking taxpayers, and when a check goes missing or is stolen, it directly impacts their livelihoods,” Malliotakis stated. “Providing reissued payments via direct deposit is a sensible solution to this pervasive and systematic issue, preventing criminals from targeting taxpayers and stealing their hard-earned money.”
Malliotakis’ district has seen a rise in mail fraud cases, with checks worth at least $5.3 million stolen across 377 incidents as of February 12, 2025. Check amounts ranged from just a few hundred dollars to as much as $500,000. One constituent required their check to be reissued four times before it was successfully received.
Tax Refund Checks: Actionable Steps
As the tax season kicks off, the most effective way to reduce the risk of mail fraud is to file your tax return electronically and choose direct deposit.
Taxpayers who e-file can utilize the ‘Where’s My Refund’ feature to monitor their tax refund status within 24 hours of submission. If you have filed a paper return, it can take up to four weeks to track your refund.
However, as of March 14, 2025, the IRS had issued roughly 49.8 million tax refunds. Out of these, around 1.5 million refunds were distributed as paper checks, highlighting the difference between total refunds and direct deposits.
If you’re worried that your refund might be delayed or stolen, you can request a refund trace directly through the IRS using the ‘Where’s My Refund’ tool, by calling the agency’s automated line, or by contacting a customer service representative at 800-829-1040.
There is one exception: Joint filers may not be able to start a refund trace through the automated system and might be required to complete a Form 3911, Taxpayer Statement Regarding Refund, to initiate the process.
Bear in mind that processing times for some federal refunds may be longer. You can refer to Kiplinger’s tax refund calendar to ascertain when you could expect your mailed check or direct deposit.
If the tax refund or check you believe was stolen, lost, or destroyed comes from a state program, be sure to report your situation to your State Comptroller’s Office.
