The IRS’s electronic payment requirement for all tax transactions took effect on September 30, 2025. In the three months since, many trustees and estate administrators have transitioned to electronic payments through EFTPS or wire transfers. While some have adjusted smoothly, others are still facing challenges with enrollment delays, PIN verification, and coordination across multiple accounts.
Understanding the New Mandate
As of September 30, 2025, the IRS has officially eliminated paper check payments. Under Executive Order 14247, all federal tax payments—including those made by trusts and estates—must now be submitted electronically. This change is part of the federal government’s initiative to modernize payment systems and align with global banking standards. The transition has reshaped how fiduciaries manage tax obligations, removing the traditional “mail float” and requiring payments to clear by their due dates.
Key deadlines such as the October 15, 2025, extended filing date were among the first tests of the system. With additional deadlines approaching in early 2026, including January 15 (fourth-quarter estimated payments) and April 15 (tax season filing), trustees must ensure their electronic payment systems are functioning smoothly.
Why Trusts and Estates Face Ongoing Challenges
Since the mandate took effect, many fiduciaries have discovered that the new system still presents unique administrative and technical hurdles.
Trusts and estates cannot use IRS Direct Pay, which remains available only to individual taxpayers. Instead, fiduciaries must rely on two main options:
- Electronic Federal Tax Payment System (EFTPS)
- Wire transfers from their financial institution
Both methods require planning and setup. EFTPS enrollment involves a mailed PIN verification step that can take up to two weeks—or longer if the letter is delayed or lost. Wire transfers, while faster, often come with additional costs and must adhere to strict formatting and compliance requirements outlined in the Electronic Federal Tax Payment System Financial Institution Handbook.
For trusts and estates operating overseas or managing multiple accounts, these logistical complexities are compounded by the evolving ISO 20022 standards governing cross-border payments.
Early Lessons from Implementation
With the mandate now in effect, trustees and estate administrators are gaining firsthand experience with the system’s benefits and limitations. Some have found that electronic payments offer improved transparency and recordkeeping through EFTPS’s tracking and scheduling tools. Others, however, have encountered issues such as:
- Delayed PIN mailings, forcing re-enrollment or reliance on wire transfers
- Payment mismatches caused by differences between the taxpayer’s name and the account name
- Banking institutions unprepared to handle large or complex IRS wire transfers
These challenges underscore the need for ongoing attention to compliance and coordination between fiduciaries, financial institutions, and tax professionals.
Ongoing Action Steps for Trustees and Executors
Even with the system in place, proactive management remains critical. Trustees and estate administrators should:
1. Verify EFTPS Enrollment and Access
If you have not yet registered or confirmed your EFTPS credentials, do so immediately. Processing delays continue to occur, and verifying access well before the next payment due date is essential.
2. Coordinate Closely with Financial Institutions
Ensure your bank is handling federal tax transfers correctly. Discuss backup options—such as same-day wire capabilities—in case of EFTPS system issues.
3. Monitor Payment Timing and Cash Flow
Payments must clear by their due date, not simply be initiated. Adjust cash flow strategies and maintain liquidity around quarterly deadlines to avoid penalties.
4. Consolidate Oversight for Multi-Entity Families
For high-net-worth families managing multiple trusts or estates, each entity requires its own EFTPS registration. Establish centralized oversight or reporting systems to maintain visibility across payment obligations.
5. Engage Professional Advisors
Tax and fiduciary advisors can help confirm EFTPS enrollment, monitor compliance, and coordinate efforts among accountants, wealth managers, and financial institutions.
Strategic Considerations and Opportunities
While the transition to electronic-only payments has created short-term friction, it also offers long-term advantages. Trustees who adapt early are finding opportunities to streamline financial operations, improve documentation, and enhance overall oversight.
- Transparency: EFTPS provides detailed payment histories and reports that support fiduciary accounting and audits.
- Efficiency: Automated scheduling reduces the risk of missed deadlines and removes manual check-processing steps.
- Integration: Digital payment systems allow for better coordination between tax planning and cash management strategies.
These benefits align with the broader goal of modernizing fiduciary financial practices, ensuring greater accuracy and accountability for clients and beneficiaries alike.
Industry Response and Continuing Advocacy
Earlier this year, the American Institute of CPAs (AICPA) and other professional organizations urged the IRS to delay the mandate for trusts and estates or expand Direct Pay access to fiduciary entities. Despite these requests, no extensions or exemptions were granted, and the September 30 deadline proceeded as planned.
Industry groups continue to advocate for improvements, including more flexible enrollment processes and simplified verification procedures. However, the Treasury Department has reaffirmed its commitment to the new system and indicated no plans for rollback.
Preparing for 2026 and Beyond
As fiduciaries adjust to the electronic payment requirement, the focus now shifts to refining processes and ensuring reliability ahead of the 2026 tax season. Trustees should confirm that all systems are functioning properly, that EFTPS accounts remain active, and that internal tracking mechanisms are in place for future payments.
Early preparation remains the best safeguard against last-minute issues, especially as the next wave of quarterly payments approaches in January 2026.
Conclusion
The IRS’s electronic payment mandate is now fully in effect, marking a permanent shift in how trusts and estates manage their tax responsibilities. While the transition has brought new logistical and technical challenges, it also offers a path toward greater efficiency, transparency, and control.
Trustees and fiduciaries who continue to monitor their electronic payment systems, verify compliance, and collaborate with trusted advisors will remain well-positioned to meet ongoing IRS requirements and serve their clients with confidence.
If you’re unsure whether your trust or estate is fully compliant with the IRS’s new electronic payment mandate, our team can help. If you are not a client of Cornerstone Trust, we recommend confirming with your trustee that they are in full compliance with the IRS’s new electronic payment mandate. Should they require assistance, our team can help by serving as a co-trustee or in another supporting capacity.