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A large number of filers are facing delays in tax refunds amid the government phasing out paper verification.
House Ways and Means Committee Democrats this week sent another letter Treasury Secretary Scott Besant with “additional concerns” about the nearly 1.4 million IRS notices sent to filers about refund delays related to paper payment requests. At the time of the lawmakers’ initial letter on March 9, they said more than 830,000 taxpayers had received such notices.
IRS notice, known as CP53EAsks taxpayers for updated banking information to receive refund payments 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 matter is time-sensitive and urgent as individuals and families facing delays need their tax refunds to offset the higher costs of gas, food and basic necessities,” the lawmakers wrote.
The refund payment change stems from an executive order signed by President Donald Trump in March 2025, which requires government agencies to shift from paper to electronic payments.
IRS in September announced changes Eliminate paper payments to protect taxpayers, expedite refunds, and reduce costs.
Treasury did not respond to CNBC’s request for comment about the letter from House Ways and Means Committee Democrats.
Many Americans are looking at larger tax refunds this season due to changes implemented through President Donald Trump’s “Big Beautiful Bill.”
Till March 13, average return amount According to the latest IRS data, the amount for individual filers was $3,623, about $350 more than a year earlier.
Some economists say that windfall could be offset by higher fuel prices amid the Iran war, depending on how long the conflict lasts. Gasoline prices nationwide averaged $3.97 a gallon on Friday, up nearly 33% from a month earlier. aaa.
The Trump administration has focused on the size of the tax refunds as many Americans grapple with the rising costs of fuel, groceries, housing and other living expenses. Affordability is a key issue for both parties as the midterm elections approach in November.
Changes in electronic tax refund
During the 2025 filing season, roughly 94% individual taxpayers According to the National Taxpayer Advocate, opt for a refund via direct deposit by providing banking details on your return. The remaining filers, about 10 million taxpayers, received refunds through paper checks.
The IRS transition from paper checks to electronic payments affects “a range of populations,” Omed Ferozi, a practice professor and director of the Low-Income Taxpayer Clinic at Temple University’s Beasley School of Law, told CNBC.
Turquoise, who? Comments submitted Before the change, Treasury, through the American Bar Association, said the policy could significantly impact “unbanked” taxpayers, seniors, unhoused individuals or younger filers who move more frequently.
If you receive a CP53E notice, you must provide banking details through an IRS online account within 30 days, or 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.
While Firozi said he supports the reasons for phasing out paper checks, the implementation has “added more administrative paperwork and burden that seems counterproductive.”
Ellen Maag, a senior fellow at the Urban-Brookings Tax Policy Center, told CNBC that she agrees with the Treasury that paper refunds have been “problematic” for several reasons.
Paper checks have more errors, they don’t always reach the right person, he said, and the agency prefers more secure forms of payment.
But “when you move quickly, and you implement a policy without advance notice, it’s very difficult for people to react,” Maag said.
At the end, deferred tax refund This could create “financial difficulties” for some filers, he said, such as delaying important purchases, medical care or turning to higher-cost financial services.
