The default way millions of retirees receive a tax refund is being switched off. Under Executive Order 14247, the IRS is phasing out paper refund checks, and the change took hold for the 2026 filing season covering 2025 returns. For a taxpayer who files without bank-account information, the agency no longer simply mails a check; it freezes the refund, sends a notice demanding electronic-payment details, and holds the money until the taxpayer responds. Between the response window and the processing delay that follows, a refund that once arrived in a few weeks can now stall past two months.
How the paper-check phase-out works
The shift began with a March 2025 executive order directing the federal government to move nearly all payments to electronic delivery, and the Treasury applied it to tax refunds. According to the IRS, the phase-out of paper refund checks began with individual taxpayers, making the 2026 filing season the first in which most individual refunds are expected to arrive electronically. The agency’s preferred channels are direct deposit into a bank or credit-union account, a prepaid debit card, or a digital wallet, and its guidance now treats a paper check as an exception to be requested rather than the automatic fallback it used to be.
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Notice CP53E and the frozen refund
The friction shows up when a return arrives without banking details. Rather than cut a check, the IRS holds the refund and mails Notice CP53E, a letter asking the filer to supply electronic-payment information. The agency’s CP53E notice page explains that a recipient has 30 days to add a bank account or select an exception that permits a paper check. Only after that window closes without a response does the agency fall back to a paper check, and even then the guidance warns the mailed check will be delayed by roughly six weeks beyond the notice period.
Stacked together, those steps are where the multi-week freeze comes from. The 30-day response window and the additional six-week processing lag push the total wait well past ten weeks for a filer who never provides direct-deposit information, far longer than the historical turnaround for an electronically filed return. The same freeze can be triggered a second way: the agency’s questions and answers on Executive Order 14247 note that when a direct deposit is rejected by a bank, the IRS in most cases will not automatically reissue a paper check but will instead send a letter or CP53E and hold the refund until corrected account details arrive.
Who gets caught by the change
The taxpayers most exposed are precisely those who have long relied on a mailed check. Older filers who do not bank online, who closed an account, or who moved without updating records are the group most likely to file without valid direct-deposit information and land in the CP53E holding pattern. A retiree who has always watched the mailbox for a Treasury envelope may not realize the default has flipped until a refund that used to appear on schedule simply does not come, replaced instead by a notice demanding bank details.
There are documented exceptions, which is what keeps the phase-out from being absolute. The executive order’s provisions carve out relief for people without access to banking or electronic-payment services, cases of undue hardship, and certain emergency or law-enforcement situations, and the CP53E process lets a filer formally elect a paper check by claiming one of those conditions. But the exception must be claimed; it is not granted automatically, and a filer who ignores the notice does not get faster service, only a slower check.
Why Treasury forced the change
The phase-out is not an isolated IRS decision but part of a government-wide push with a specific rationale attached. Executive Order 14247, signed March 25, 2025, directs nearly all federal payments to go electronic and cites a hard number to justify it: Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic transfer. The order set the paper-check wind-down to begin September 30, 2025, casting paper as both a fraud risk and a cost the government no longer wants to carry. The gap it creates for filers is stark: an electronically filed return with direct deposit is typically refunded within about 21 days, while the CP53E holding pattern can stretch a mailed refund past ten weeks.
Inside the IRS, the change has drawn a warning from the agency’s own watchdog. The National Taxpayer Advocate cautioned that as paper checks are phased out, unbanked and otherwise vulnerable taxpayers must not be left behind, the very retirees and fixed-income filers most likely to have relied on a mailed refund. The exceptions written into the order exist to answer that concern, but they place the burden on the taxpayer to identify as an exception and claim it, rather than on the agency to spot who cannot easily switch to electronic payment. The refund change is also only one front of the same shift: under the identical September 30, 2025 deadline, Social Security, veterans’ benefits, and federal vendor payments are all being steered onto electronic delivery, so a retiree may meet the paperless rule in several parts of their financial life at once.
The larger consequence is that a paperwork detail has become a cash-flow event. A refund is, for many retired households, the single largest lump sum of the year, and a policy that can freeze it for more than two months turns a missing bank-account line into a real delay in money already owed. The safest response under the new system is to file with valid direct-deposit information from the start, because the paper check that used to be the reliable default is now the slow, last-resort path the agency actively steers filers away from.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
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