1.4 million face tax refund delays amid IRS paper check phaseout

A growing number of filers are facing tax refund delays as paper checks are phased out across the government.

House Ways and Means Committee Democrats this week I sent another letter He expressed “additional concerns” to Treasury Secretary Scott Bessent about nearly 1.4 million IRS notices sent to filers about refund delays related to paper payment requests. In lawmakers’ first letter dated March 9, they noted that more than 830,000 taxpayers had received such notices.

Known as IRS notice CP53EIt asks taxpayers for up-to-date bank information in order to receive a refund via direct deposit. Recipients have 30 days to provide these details through an IRS online account, or the agency will issue a paper refund after six weeks.

“This issue is time-sensitive and urgent as individuals and families facing delays need tax refunds to offset the high costs of gas, food and basic needs,” lawmakers wrote. he wrote.

The change in refund payment stems from an executive order signed by President Donald Trump in March 2025 that required government agencies to switch from paper to electronic payments.

IRS in September announced the transition Payments are made on paper to protect taxpayers, speed up refunds and reduce costs.

Treasury did not respond to CNBC’s request for comment on the letter from Democrats on the House Ways and Means Committee.

Many Americans are seeing larger tax refunds this season due to changes enacted through President Donald Trump’s “big beautiful bill.”

As of March 13, average refund amount For individual filers, that figure was $3,623, up nearly $350 from a year ago, according to the latest IRS data.

Some economists say this windfall could be offset by rising fuel prices during the Iran war, depending on how long the conflict lasts. The price of gasoline on Friday averaged $3.97 per gallon across the country, up nearly 33 percent from a month ago. AAA.

As many Americans struggle with rising fuel, food, housing and other living expenses, the Trump administration has focused on the size of their tax refunds. Affordability is a key issue for both parties as the November midterm elections approach.

Roughly in the 2025 application season 94% of individual taxpayers According to the National Taxpayer Advocate, they chose to issue refunds via direct deposit by providing their bank information on returns. The remaining approximately 10 million taxpayers received their refunds via paper check.

The IRS’s switch from paper checks to electronic payments affects “a range of populations,” Omeed Firouzi, a professor of practice and director of the low-income taxpayer clinic at Temple University Beasley School of Law, told CNBC.

Who is Firuuzi? comments posted In a statement to the Treasury through the American Bar Association before the change, it was stated that the policy could significantly impact “unbanked” taxpayers, senior citizens, homeless individuals or younger applicants who move more frequently.

If you receive a CP53E notice, you must provide your bank information through an IRS online account within 30 days; otherwise, the IRS will issue a paper refund after six weeks. But some filers don’t have easy access to Wi-Fi or computers, he said.

Although Firouzi said he supports the reasons for phasing out paper checks, the practice added “more administrative paperwork and burdens that seem counterintuitive.”

Elaine Maag, a senior fellow at the Urban-Brookings Tax Policy Center, told CNBC that she agrees with the Treasury that paper refunds are “problematic” for several reasons.

He said there are more errors with paper checks, they do not always reach the right person, and the institution prefers safer forms of payment.

But “when you move quickly and implement a policy without notice, it’s very difficult for people to react,” Maag said.

After all, overdue tax refunds It could create “financial hardships” for some applicants, such as delays in major purchases, medical care or turning to higher-cost financial services, he said.