Tax Refund Delays Impact More Filers
Many taxpayers are experiencing delays in receiving their tax refunds as the government moves away from paper checks.
This week, Democrats on the House Ways and Means Committee addressed Treasury Secretary Scott Bessent, expressing “additional concerns” regarding around 1.4 million IRS notices sent to taxpayers about refund delays linked to paper payment requests. From their initial letter dated March 9, over 830,000 individuals reported receiving such notices.
Known as IRS Notice CP53E, these require taxpayers to submit current banking information for direct deposit refunds. This information must be provided within 30 days via their IRS online account; otherwise, the IRS will issue a written refund after a six-week period.
According to the lawmakers, “This issue is urgent, as individuals and families facing delays need tax refunds to offset the high costs of gas, food, and essential goods.”
The push to transition to electronic reimbursements comes from an executive order signed by President Donald Trump in March 2025, aimed at moving government agencies away from paper payments.
The IRS announced in September the shift to electronic payments to enhance protection for taxpayers, expedite refunds, and reduce costs.
CNBC reached out to the Treasury Department for comment on the letter, but there was no response.
Tax Refunds and Rising Costs
This tax season, a number of Americans are seeing larger refunds, partly due to changes brought about by what some refer to as Trump’s “Big and Beautiful Bill.”
As of March 13, recent IRS data indicated that the average refund amount for individual filers stood at $3,623, which is an increase of around $350 compared to the previous year.
Some economists caution, however, that rising fuel prices, influenced by ongoing conflicts in the region, may offset this financial relief. On a recent Friday, gasoline prices nationwide averaged $3.97 per gallon, reflecting a 33% increase compared to a month prior.
The Trump administration has highlighted the increase in tax refunds as many Americans contend with escalating costs for essentials like fuel, food, and housing. This issue of affordability is becoming increasingly significant for both political parties as the midterm elections in November approach.
Transition to Electronic Refunds
For the 2025 filing season, around 94% of individual taxpayers, according to the National Taxpayer Advocate, have opted for direct deposit refunds by providing their bank details on tax returns. About 10 million taxpayers still received refunds through paper checks.
The IRS’ shift to electronic payments is affecting “a wide range of people,” as noted by Omeed Firouzi, a professor at Temple University’s Beasley School of Law and director of the Low-Income Taxpayer Clinic.
Firouzi submitted a report to the Treasury Department ahead of these changes, warning that the new policy could adversely impact “unbanked” taxpayers, the elderly, homeless individuals, or younger filers who relocate frequently.
If someone receives a CP53E notice, they need to submit their bank details through their IRS online account within 30 days. Failing to do so could mean a written refund will be sent after six weeks. However, not all filers may have reliable access to the internet or computers.
While Firouzi supports the rationale for moving away from paper checks, he also believes the added complications seem counterproductive.
Elaine Maag, a senior fellow at the Urban-Brookings Tax Policy Center, concurs with the Treasury’s view that paper refunds come with several issues. She pointed out that paper checks are prone to errors and can fail to reach the correct recipient, prompting officials to prefer safer electronic methods.
Nonetheless, she remarked, “When you act quickly and implement policies without prior notice, it’s very difficult for people to react.” Delayed refunds, as he noted, could lead to “financial hardship” for some, impacting their ability to make timely purchases or access necessary medical care.
