Over the past year, we’ve been getting the same question again and again from U.S. citizens living in Israel and other countries:
“How are we supposed to receive IRS refunds if we don’t have a U.S. bank account?”
That question just became a lot more urgent.
Under Executive Order 14247 – Modernizing Payments To and From America’s Bank Account, the U.S. government has directed federal agencies, including the Internal Revenue Service, to move away from paper checks and toward electronic payments—primarily direct deposit to U.S. bank accounts.
For taxpayers living abroad, this creates a very real, very practical problem.
What EO 14247 Means in Practice
The IRS has announced that it intends to phase out paper refund checks, starting with individual taxpayers. While paper checks have not been eliminated entirely yet, the direction is clear:
- Electronic refunds are preferred
- Paper checks are becoming slower, less reliable, and more likely to be delayed
- Overseas taxpayers without U.S. banking access are disproportionately affected
For many U.S. citizens in Israel, the traditional “just wait for the check” approach is no longer realistic.
Why This Is a Big Issue for U.S. Citizens Living Abroad
Most of our clients in Israel (and elsewhere overseas):
- Do not maintain a U.S. residential address
- Cannot appear in person at a U.S. bank branch
- Are therefore unable to open a standard U.S. bank account
As a result, even taxpayers who are fully compliant—and entitled to substantial refunds—may face months of delays or administrative complications after filing.
Importantly, this issue arises after the return is filed. Once a refund is in limbo, fixing the payment method can be slow and frustrating.
Are Non-U.S. Residents Exempt?
At this stage:
- There is no blanket exemption for U.S. citizens living outside the United States
- The IRS has not issued a clear carve-out for “foreign address” taxpayers
- Any future accommodation remains speculative
In other words: do not assume the IRS will solve this for you automatically.
Refund Options for U.S. Citizens Living in Israel
Below are the realistic options currently available, along with their pros and cons.
Option 1: File Normally and Wait for a Paper Check
How it works:
You file your return without U.S. bank details. Eventually, the IRS issues a paper refund check by mail.
What to expect:
- Refunds often arrive months later than usual
- International mail delays, lost checks, and reissuance requests are common
- This option is becoming increasingly unreliable
Bottom line:
Still possible—but expect delays and uncertainty.
Option 2: Open a Traditional U.S. Bank Account
Why it’s difficult:
- Most U.S. banks require in-person branch visits
- Proof of U.S. address is usually mandatory
- Not practical for most long-term overseas residents
Bottom line:
Feasible for a small minority. Not a general solution.
Option 3: Use a FinTech Platform (e.g., Wise)
For many U.S. citizens living abroad, this is currently the most practical workaround.
Platforms like Wise can provide:
- U.S. routing and account numbers
- Compatibility with IRS direct deposit
- Access for residents of Israel and many other countries
High-Level Wise Setup Overview
(Exact requirements may change and are subject to Wise approval.)
- Initial funding (e.g., ~85 ILS by bank transfer; funds remain usable)
- Account holder name must match the bank account
- Personal details (name, gender, address)
- Compliance questions (employment, AML)
- SSN
- Proof of address (utility bill / bank statement / tax notice)
- Tax residency (typically U.S. + Israel)
- Identity documents (Israeli passport / ID / driver’s license)
- Short video verification via phone or laptop
- Verification period of several days
Important notes:
- Wise is a financial technology platform, not a bank
- Funds are not FDIC-insured
- Approval is not guaranteed and depends on Wise’s internal compliance review
- Visit WISE.com for more infomation
- Disclaimer: We have no relationship with Wise and cannot be responsible for any risks, limitations, or outcomes associated with using their platform; it is presented solely as one possible solution for receiving IRS refunds.
Why This Matters for Taxpayers (and Advisors)
Handled proactively, this change can actually improve the taxpayer experience:
- Faster receipt of refunds
- Lower international transfer costs
- Fewer follow-ups with the IRS
- Less operational friction
Ignored, it can lead to:
- Refunds stuck in limbo
- Client frustration
- Increased administrative workload
- Erosion of trust in the filing process
Are There Other Alternatives Besides Wise?
Yes—depending on the taxpayer’s profile and availability:
- Traditional U.S. banks (e.g., Bank of America, Chase, Wells Fargo)
- Other platforms offering U.S. account details (e.g., Revolut, Payoneer, Mercury). Most of these are problematic without a US address. Let us know if you have any success!
- Hybrid or institution-specific solutions
- The State Department Federal Credit Union offers accounts, but they require a US mobile phone number, and a US address with 3rd party verification. See: https://www.sdfcu.org/
Each option comes with different eligibility rules, costs, and risks.
One Important Clarification
This issue primarily affects individual taxpayers.
In many cases, the IRS is expected to continue issuing paper checks to foreign companies, though this too may evolve.
Bottom Line
Executive Order 14247 doesn’t change who gets a refund—but it is changing how refunds are paid.
For U.S. citizens living in Israel and overseas, planning ahead is no longer optional. Deciding before filing how a refund will be received can prevent months of unnecessary delays and stress.
Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, financial, or regulatory advice. While efforts have been made to ensure accuracy, IRS policies, procedures, and interpretations—including those related to Executive Order 14247—are subject to change, delay, exception, or modification without notice.
Opening or using any financial account or service (including Wise or any other third-party provider) is subject to the provider’s terms, KYC/AML procedures, eligibility requirements, and regulatory constraints. We do not control, manage, or guarantee the approval, functionality, timing, or outcome of any third-party service.
FinTech platforms are not traditional banks, and accounts may not be insured by the FDIC. Taxpayers are solely responsible for evaluating whether a particular solution is appropriate for their circumstances and for understanding any tax, regulatory, or banking implications in both the United States and their country of residence.
Additional Disclaimer – No Endorsement / Independent Decision-Making
For the avoidance of doubt, we do not endorse, recommend, or guarantee any specific bank, financial institution, or service provider, including any U.S. bank or financial technology platform referenced in this article. Any examples mentioned are provided solely for informational purposes based on current market availability and general experience, and should not be interpreted as a recommendation or preferred solution.
Each taxpayer’s circumstances are unique. Taxpayers are solely responsible for conducting their own due diligence, evaluating available options, understanding applicable terms and conditions, and assessing the legal, regulatory, tax, and financial risks associated with opening or using any account or service.
All decisions relating to the selection and use of banking or financial services—and all resulting risks, costs, delays, limitations, or consequences—remain entirely the responsibility of the taxpayer. We disclaim any responsibility or liability for outcomes arising from a taxpayer’s choice to engage with any third-party provider.