Trump Executive Order Phases Out IRS Paper Tax Refund Checks
President Donald Trump's mandate for electronic federal payments has triggered tax refund delays for over 830,000 taxpayers, sparking criticism from Democratic lawmakers over impacts on unbanked citizens.
The Internal Revenue Service transitioned to direct deposit as the default method for tax refunds during the 2025 tax season, phasing out automatic paper checks. This shift follows a March 2025 executive order by President Donald Trump intended to modernize federal transactions, reduce costs, and mitigate fraud across the IRS, Social Security, and Veterans Affairs benefits.
By March 2026, the IRS had issued more than 830,000 CP53E notices to taxpayers with missing or rejected banking information. These filers must update their details online within 30 days to avoid significant delays. While the IRS states paper checks will be issued approximately six weeks after the notice date if no response is provided, Democratic lawmakers and the National Taxpayer Advocate report that some taxpayers face waits of 10 weeks or more.
Democratic members of the House Ways and Means Committee and Senate Finance Committee have criticized the policy, arguing it causes undue hardship for approximately 10 million unbanked Americans, including victims of domestic violence and those with religious constraints. Treasury Secretary Scott Bessent, serving as acting IRS Commissioner, has defended the filing season's efficiency, reporting that 63.5 million returns were processed by March 8, 2026, with average refunds increasing due to the One Big Beautiful Bill Act. Separately, Senator Ron Wyden challenged Bessent's appointment as a strategy to bypass the Senate confirmation process for a permanent Commissioner.
