Tunyada Revelation | E+ | Getty Images
A growing number of tax filers are faced with tax refund delays in the middle of a government-wide conflict phasing out of paper checks.
Democrats on the House Ways and Means Committee this week sent another letter ” to Treasury Secretary Scott Bessent, with “additional concerns” about approximately 1.4 million IRS notifications sent to filers regarding refund delays related to paper payment requests. At the time of the lawmakers’ initial letter, dated March 9, they claimed that more than 830,000 taxpayers had received such notices.
The IRS notice, known as CP53Easks taxpayers for up-to-date banking information to receive refunds via direct deposit. Recipients have 30 days to provide this information via a IRS Online Accountor the agency will issue a paper refund after six weeks.
“This issue is pressing and urgent because individuals and families facing delays need their tax refunds to offset the high cost of gasoline, food and basic necessities,” the lawmakers wrote.
The change in reimbursement payment results from a decree signed by the president Donald Trump in March 2025, requiring government agencies to move from paper to electronic payments.
The IRS in September announced the transition away from paper payments to protect taxpayers, speed up refunds and reduce costs.
Treasury did not respond to CNBC’s request for comment on the letter from House Ways and Means Committee Democrats.
Read more of CNBC’s personal finance coverageMany Americans see larger tax refunds this season due to changes signed into law by the president Donald TrumpIt’s “a big, beautiful bill.”
From March 13, the average reimbursement amount for individual filers was $3,623, up about $350 from a year ago, according to the latest IRS data.
This windfall could be offset by rising fuel prices in the middle of Iran wasdepending on the duration of the conflict, some economists say. The price of essence The national average price on Friday was $3.97 per gallon, up about 33% from a month ago, according to AAA.
The Trump administration has focused on amount of tax refunds so many Americans fight against rising costs fuel, groceries, housing and other living expenses. Affordability is a key issue for both parties as the November midterm elections approach.
The shift to electronic tax refunds During the 2025 filing season, approximately 94% of individual taxpayers have opted for direct deposit refunds by providing bank details on their returns, according to the National Taxpayer Advocate. The remaining filers, about 10 million taxpayers, received refunds by paper check.
The IRS’s transition from paper checks to electronic payments affects “a whole range of populations,” Omeed Firouzi, professor of practice and director of the Low-Income Taxpayer Clinic at Temple University’s Beasley School of Law, told CNBC.
Firouzi, who comments submitted at Treasury via the American Bar Association before the change, said the policy could have a significant impact on “unbanked” taxpayers, seniors, unhoused individuals or younger filers who move more frequently.
If you receive a CP53E notice, you must provide your banking 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 supported the reasons for phasing out paper checks, the implementation added “more red tape and burdens that seem counterintuitive.”
Elaine Maag, a senior fellow at the Urban-Brookings Tax Policy Center, told CNBC that she agreed with Treasury that paper refunds were “problematic” for a variety of reasons.
Paper checks have more errors, they don’t always reach the right person and the agency prefers more secure payment methods, she said.
But “when you act quickly and implement a policy without notice, it’s very difficult for people to react,” Maag said.
Eventually, delayed tax refunds can create “financial hardship” for some filers, such as delays on major purchases, medical care or reliance on more expensive financial services, she said.
