Commentary · Tax Strategy
The IRS Is Phasing Out Paper Refund Checks. Here's What That Means for Taxpayers
Written by the William Allan team · Published
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The IRS began phasing out paper refund checks for individual taxpayers on September 30, 2025, as part of the federal payment changes under Executive Order 14247. Electronic delivery is the preferred route, but paper checks have not disappeared in every situation.
This article was originally published in January 2026 and has been updated for IRS guidance available September 10, 2026.
Why the IRS Is Making the Change
The IRS points to security, speed, and administrative cost. In its phaseout announcement, it reported that paper checks were more than 16 times more likely than electronic payments to be lost, stolen, altered, or delayed.
For taxpayers, accurate direct-deposit information can remove the need to wait for a check in the mail. Electronic delivery still does not guarantee a particular refund date: return processing, verification, and other issues can cause delays.
What Happens Without Usable Bank Information
The IRS may temporarily hold a refund and send a CP53E notice when bank information is missing, invalid, or rejected. Under its current CP53E instructions, taxpayers have 30 days to add or update account information, or select an available paper-check exception, through their IRS online account.
The IRS also says that if there is no response, it will issue a paper check after six weeks. Other return or refund issues can still affect payment. The notice and the IRS refund-status tools are the places to check the specific case.
This is why “electronic-only” is too broad a description of the current process. Paper filing remains allowed, and paper refunds remain possible under IRS procedures.
How to Prepare
- Check the routing number and account number carefully before filing. Use an account in your own name or a joint account you share.
- If you do not have a bank account, compare available low-cost accounts or ask a prepaid-card or payment-app provider whether its account accepts IRS direct deposits.
- Confirm the provider’s required routing and account details. Do not assume every card or app can receive a tax refund.
- If you receive a CP53E notice, follow the instructions promptly. The option to add refund bank information in an IRS online account appears when the relevant notice has been issued; it is not a general promise that any filed return can be changed at any time.
- Keep your mailing address current so an IRS notice or an available paper check can reach you.
What About Tax Payments?
The broader federal initiative also addresses payments to the government. As of this update, the IRS continues to accept checks and money orders for tax payments. Its payment modernization questions and answers explain the transition and available methods.
There is no universal 2027 electronic-only cutoff established in that guidance. Check current IRS instructions when arranging estimated payments or paying a balance due.
The practical step is straightforward: verify where your refund should go, keep track of any notice, and use the current process for your situation.
This commentary is for informational purposes only and is not investment, tax, or legal advice. All investing involves risk, including the possible loss of principal, and past performance does not guarantee future results.