The Internal Revenue Service (IRS) is poised to implement significant changes regarding the delivery of federal income tax refunds starting next year, particularly for those who prefer receiving paper checks. As part of a broader initiative to transition away from paper-based transactions, individuals who opt for paper checks may experience delays of up to six weeks or longer before receiving their refunds.
This move comes after President Donald Trump signed an executive order aimed at reducing the reliance on paper checks, citing concerns over associated costs, delays, and risks of fraud. As a result, by September 30, federal agencies—including the IRS—were instructed to begin phasing out paper checks. The decision is largely due to increased incidents of fraud linked to paper checks, including a recent investigation into a $63 million scheme in metro Detroit where tax refund checks were being stolen from the mail and sold on online platforms.
If a taxpayer’s refund check is stolen, the process to obtain a replacement can be lengthy. Taxpayers are advised to contact the IRS to initiate a refund trace, but they must allow time for the IRS to investigate before making such a request. Those who received their refunds through direct deposit can expect to wait approximately 26 days if their funds were misdirected. However, those waiting for a paper check face a much longer wait of six weeks before they can request a trace on their refund.
In a bid to encourage direct deposits, the IRS has announced several new initiatives that will be rolled out in the coming year. For instance, taxpayers will receive letters prompting them to provide banking information if it is not included with their tax return. Additionally, e-filers will get alerts during the filing process if their banking information is missing, although their returns will still be accepted.
The IRS has also made clear that taxpayers will have more options for submitting their banking information, such as through their online IRS accounts and a dedicated helpline for those requesting exceptions to receive paper checks. However, one of the more alarming aspects of these changes is the introduction of a mandated six-week delay for issuing paper checks if taxpayers do not provide their banking information. If no alternative arrangements are made within that time frame, checks will be mailed only after the six-week period has elapsed.
Historically, receiving a paper check after filing an electronically submitted return has taken approximately four to six weeks. In contrast, taxpayers can often expect their direct deposit refunds within 21 days after the IRS accepts their returns. This shift is likely to produce frustration among those who do not have bank accounts or prefer not to use digital financial options, as the IRS’s forthcoming guidelines will effectively push more individuals toward electronic methods.
IRS officials indicated they would provide clearer guidance on these changes prior to the 2026 filing season. Analysts believe that recipients of paper checks will face further delays, marking a notable shift in how tax refunds are handled.
The transition to direct deposit is particularly critical for lower-income individuals, many of whom depend on their tax refunds as a significant financial resource. Nonprofit organizations, like the Accounting Aid Society, note that while a majority of tax filers already utilize direct deposit, a considerable number still prefer paper checks. The organization has emphasized the benefits of direct deposit and the importance of encouraging taxpayers to explore banking options.
Efforts to communicate these changes early could play a crucial role in mitigating taxpayer frustration as the IRS gears up for the upcoming tax season.
