Direct Deposit Updates
Executive Order 14247, titled “Modernizing Payments To and From America’s Bank Account,” was signed on March 25, 2025.
The executive order stated that all federal disbursements, including federal tax refunds, must be made by electronic payment.
In a recent update posted on May 11, 2026, the Internal Revenue Service (IRS) provided clarity on how taxpayers can provide banking information, how to resolve account access issues, and what consequences taxpayers might face in the event the taxpayer does not respond to communication from the IRS.
Due to Executive Order 14247, the IRS began phasing out the issuance of paper checks for tax refunds in the fall of 2025, as paper checks are slower and less secure. If a taxpayer filed a return failing to provide banking information or provided invalid bank information, the taxpayer will receive a CP53E notice in the mail. This notice provides the taxpayer with 30 days to provide the IRS with new or updated bank account information through their Online Account on the IRS website. The May 11th update gave taxpayers additional information for those who received a CP53E and will need to add/update their banking information. An individual can login to their IRS Online Account here.
Taxpayers can request an exception to direct deposit, as the IRS has acknowledged that some taxpayers either prefer not to receive their refund by direct deposit or lack a bank account to receive the deposit. It should be noted that the IRS will not issue refunds to family members or friends of the taxpayer. The IRS is also offering alternatives to direct deposit, including prepaid debit cards, mobile payment apps, and digital wallets. Taxpayers can have refunds be directly deposited into Individual Retirement Accounts (IRAs). The IRS also provides resources to find free or low-cost bank accounts. Links to these resources are listed here:
Additionally, if the taxpayer does not respond to the CP53E notice, the IRS will automatically issue a paper check after six weeks. If the banking information provided to the IRS cannot be validated, the IRS will also issue a paper check.
About DSWD Advisory
DSWD Advisory is a full-service accounting and advisory firm that was founded in 2009. Firm leadership has earned the loyalty of clients in the numerous industries they serve nationwide; in industries ranging from financial services to manufacturing and retail. The firm provides services including Accounting, Tax, Peer Review, Consulting, and more; with the goal to provide clients with a trusted advisor that is truly vested in their business. Learn more about DSWD Advisory Group LLC at www.www.dswd-advisory.com.
