KPMG reviews first year of digital tax refunds for global workers

The first filing season under the IRS’s digital refund rules turned a paper-check problem into a workflow test for global mobility teams. KPMG’s July 2 review said the 2026 filing season was the first year of the new process, and that paper refund checks were no longer the default when taxpayers did not provide direct deposit information.

The IRS tied the shift to Executive Order 14247, Modernizing Payments to and From America’s Bank Account, and said the change began with the 2026 filing season. It has also said direct deposit generally gets refunds to taxpayers in less than 21 days in many cases, while mailed refunds can take six weeks or longer. The agency says paper checks and other paper instruments are more likely than electronic payments to be lost, stolen, altered or delayed. Checks and money orders are still accepted for tax payments for now.

KPMG had already warned Treasury that moving away from paper checks could create refund delays, administrative burdens and increased collection risk for employers with globally mobile workers. That warning now looks less theoretical for employers running tax equalization programs, where the company often pays taxes on an assignee’s behalf and later relies on refunds or reconciliations to square the account.

The compliance friction sits in the details. The Taxpayer Advocate Service said about 94% of individual taxpayers already provided direct deposit information during the 2025 filing season, but that still leaves a meaningful minority who cannot or do not want to use it. For global workers, that problem can be sharper: some do not have a U.S. bank account, some run into routing problems with foreign banks, and some change addresses often enough that a refund process built around paper fallback can break down quickly.

KPMG’s point is that the change is not just about how the IRS sends money. Treasury guidance indicates refunds may be delayed if taxpayers do not provide the required information, and the IRS may no longer automatically fall back to a paper check when direct deposit cannot be implemented. That pushes global mobility teams to tighten assignment letters, internal controls, employee communications and escalation protocols so payroll, HR and tax teams know where refunds are supposed to go and how to recover them when they do not.

For KPMG professionals working in tax, mobility and workforce consulting, the first year of digital refunds has made one thing plain: refund delivery is now part of the assignment design, not a back-office afterthought.