Talking Tax Small Business, Trusts Brace for Phaseout of Paper Tax Refunds
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Jul 30, 2025 Cheri Freeh, Chair of the Tax Executive Committee at AICPA, shares critical insights on the imminent phaseout of paper tax refunds. She highlights the confusion facing low-income and unbanked taxpayers as they shift to electronic payments. Freeh also discusses the challenges real estate trusts face when submitting banking info under current IRS rules. Additionally, she sheds light on the banking obstacles that high-risk businesses, particularly in the marijuana industry, endure when trying to secure services for direct deposits.
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Treasury Ending Paper Checks
- The Treasury Department is ending paper checks by October to modernize tax refund payments.
- Electronic payments are more efficient and reflect IRS modernization efforts.
Trusts Face Direct Deposit Challenges
- Trusts usually can't provide direct deposit info unless expecting refunds over $1 million.
- Without updates, smaller trusts may struggle to receive electronic tax refunds.
Trusts Should Attach Bank Info
- Trusts should proactively attach IRS Form 8302 with banking info for refunds under $1 million.
- Mark correspondence with the executive order to aid IRS processing.