The IRS has announced a major change that will affect how individual taxpayers receive their tax refunds. On September 30, 2025, the IRS began phasing out paper refund checks for individual taxpayers, as required by Executive Order 14247. This marks the first step in a nationwide transition to fully electronic refund payments.

Why Is the IRS Making This Change?

According to the IRS, transitioning to electronic refunds offers several key benefits:

  1. Improved Security: paper checks are far more likely to be lost, stolen, altered, or returned undeliverable than electronic payments.
  2. Faster Refund: electronic refunds generally reach taxpayers much faster (often within about 21 days for e-filed returns with direct deposit) than paper checks sent by mail.
  3. Reduced Costs: Electronic payments are significantly more efficient and cost effective for the federal government, reducing administrative expenses.

How This Change Affects You

  1. Filing Your Taxes Stays the Same: There is no change in how you file your tax return. You can continue using your preferred filing method.
  2. Refunds Will Be Delivered Electronically. Most taxpayers will receive refunds through:
    • Direct deposit to a bank account
    • Prepaid debit cards, digital wallets, or other secure electronic payment methods
  3. For Clients Without Bank Accounts: The IRS recognizes that some taxpayers do not have bank accounts. In those cases, alternative electronic methods, such as prepaid cards or other secure accounts, will be offered to ensure refunds can still be delivered.

Starting in 2026, if you request a paper check (or provide no bank info), the IRS will mail Notice CP53E. It will ask for your routing and account numbers for direct deposit and note your refund will be held for 6 weeks. Reply within 30 days of the notice date. Provide bank routing and account numbers for direct deposit or explain a valid reason why you need a paper check (e.g. hardship or lack of electronic options). Once received, the IRS will process your refund as requested (electronic or paper, if approved).

What You Should Do Now

This is a significant but manageable change. Most taxpayers already receive refunds electronically and the IRS transition simply brings this into the mainstream.

To prepare:

  • Make sure your bank account information is up to date with your tax preparer or the IRS systems.
  • Expect refunds to be delivered electronically by default.
  • Reach out to us if you need help updating direct deposit details or reviewing your filing options.