Taxpayers who expect a federal income tax refund are ending up with the wrong kind of paper when they’d prefer a paper tax refund check. They’re getting an IRS notice, instead of seeing their refund cash.
The Internal Revenue Service was on track to send more than 830,000 notices, officially called IRS Notice CP53E, by mid-March to individual taxpayers who failed to include their bank account information on their tax returns. That’s according to a letter dated March 9 and sent by two Democratic congressional leaders, U.S. Rep. Danny Davis, of Illinois, and U.S. Rep. Terri Sewell, of Alabama, to Scott Bessent, the Internal Revenue Service’s acting commissioner.
The letter raised concerns about the new rules relating to the end of paper tax refund checks during the 2026 tax season.
“Having reviewed the IRS notice and called the IRS phone lines, we learned that there is no simple process for these taxpayers to request an immediate release of their refund by paper check without waiting at least 10 weeks,” according to Davis and Sewell.
“Effectively, the president, unilaterally through his Executive Order, is causing undue hardship on millions of Americans by delaying their paper refunds for months. This delay is not mandated by the Internal Revenue Code,” according to the March 9 letter.
The IRS is not allowing people to update their bank account information by calling a toll-free number. Instead, taxpayers who receive these letters are being asked to take several steps, and they’re being told that they can only update bank account information at this point by accessing their IRS online account within 30 days of receiving the CP53E notice.
And the IRS states: “If you don’t respond to the notice, we will issue a paper check after six weeks. For updates on your refund status, visit ‘Where’s My Refund.'”
Yep, one massive headache is ahead for those who expect a refund but don’t provide bank account information when filing a 2025 federal income tax return.
Making matters worse, some taxpayers in these situations can be financially vulnerable or lack much of a support system.
In some cases, people who aren’t tech-savvy may struggle to use online banking, apps or websites. Others may not trust financial institutions and not want to open a bank account.
Davis and Sewell indicate that some taxpayers who wanted paper refund checks may not be able to use direct deposit because they are among the unbanked.
The National Taxpayer Advocate raised concerns about the unbanked during the transition away from paper checks. “According to the Federal Deposit Insurance Corporation’s 2023 report, 4.2% of U.S. households — about 5.6 million people — do not have a checking or savings account,” the National Taxpayer Advocate wrote last October.
“Without a bank account or other accommodations, receiving a direct deposit is simply not possible. For these individuals, paper checks are not a preference; they’re a lifeline.”
Or they “have impairments, or face systemic or geographic challenges that prevent them from being able to create IRS online accounts or receive electronic tax refunds.”
The National Taxpayer Advocate also noted that some religious communities, including some Amish and Mennonite sects, avoid using electronic financial systems altogether based on deeply held religious beliefs.
In addition, the National Taxpayer Advocate noted that victims of domestic violence may be unwilling or unable to share their bank information with the IRS due to safety, control, or privacy concerns. “In some cases, the abuser may monitor the victim’s financial transactions, including deposits, which may reveal the victim’s location or financial activity and thereby trigger further abuse or stalking,” the advocate’s blog noted.
Matt Hetherwick, chief program officer for the nonprofit Accounting Aid Society in Detroit, said he would recommend that taxpayers have their direct deposit information ready and accessible before they have their tax return prepared.
Options include visiting a local bank or credit union to open an account and reviewing a list of Bank On Detroit partners offering affordable accounts at the city of Detroit website. See DetroitMi.gov and search “BankOn.”
Some free or low-cost account options exist. See FDIC: GetBanked and MyCreditUnion.gov for tips.
Hetherwick noted that a CP53 notice will be sent when there was a problem with direct deposit information given to the IRS. “Taxpayers should always check and then double check their tax return before it is submitted by their preparer to avoid any errors,” Hetherwick said.
On March 25, 2025, President Donald Trump signed an executive order to put a stop to paper checks to the extent permitted by law, indicating that issuing paper checks “imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies.”
As a result, the IRS is phasing out paper checks this tax season.
Most people already receive their tax refunds via direct deposit into their savings accounts or checking accounts. During the 2025 filing season, about 94% of individual taxpayers provided their direct deposit information on their Form 1040, according to a National Taxpayer Advocate blog posted in October.
Even so, more than 10 million individual taxpayers still received their refunds by paper check last year, according to the National Taxpayer Advocate.
The IRS noted earlier that the agency will send letters to individuals asking them to update their banking information if they do not provide it on their 2025 federal income tax return. Or you’d get a letter if direct deposit has been rejected by your financial institution.
If banking information is missing when filing a tax return, the IRS will still accept and process the return. You’re just going to face an added delay when it comes to receiving a federal income tax refund.
“When filing electronically, the taxpayer may receive an alert notifying them of the missing banking information and outlining the next steps if they are due a refund,” the IRS said.
If you receive a notice, you need to take steps to get a tax refund sooner, rather than later.
“When you receive the CP53E notice,” the IRS notes online, “you have 30 days to update or add a new bank account.”
The IRS says these steps will be needed:
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: Federal tax filers wanting paper refund checks get a notice instead
Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press
USA TODAY Network via Reuters Connect
