The Internal Revenue Service has introduced a new notice, CP53E, as part of changes to how taxpayers can receive federal tax refunds. The notice gives certain individual taxpayers an opportunity to provide new or updated bank account information when the IRS is unable to complete a refund through direct deposit.
For taxpayers who receive a CP53E notice, understanding the deadlines and responding carefully can help avoid unnecessary delays in receiving a refund.
Why You May Receive a CP53E Notice
According to the IRS, a taxpayer may receive a CP53E notice when a tax return reflects a refund, but the bank information provided is missing, invalid, or rejected. The notice may also be issued when the IRS makes a correction to a return that originally showed a balance due but subsequently results in a refund. Examples include adjustments involving unreported estimated tax payments or mathematical errors.
The new process follows Executive Order 14247, which directs federal agencies to transition federal disbursements, including tax refunds, toward electronic payments, subject to limited exceptions.
A 30-Day Window to Update Your Information
Taxpayers who receive a CP53E notice generally have 30 days from the date of the notice to add or update their bank account information or request a paper check under limited circumstances. Taxpayers without a traditional bank account may have other electronic payment options, including certain prepaid debit cards and mobile payment applications
Bank information must be updated through the taxpayer’s IRS Online Account. The IRS states that its employees cannot make this change by telephone. The bank account must be in the taxpayer’s name or be a joint account that includes the taxpayer.
What Happens If You Do Not Respond?
If a taxpayer does not respond to the CP53E notice, the IRS states that it will issue a paper refund check after six weeks.
However, taxpayers expecting a refund should not simply ignore the notice. Addressing it promptly can help facilitate electronic delivery and may reduce delays associated with receiving and depositing a paper check.
Watch for Scams
Because the CP53E process involves sensitive banking information, taxpayers should be particularly cautious about phishing attempts and fraudulent communications.
When accessing information electronically, the IRS advises taxpayers to verify that the website address is secure and contains“.gov.” Taxpayers who receive a CP53E notice can also go directly to IRS.gov rather than relying on unexpected links in emails or text messages.
How Windes Can Help
Receiving an unfamiliar IRS notice can be concerning, particularly when it involves a tax refund or a change made to a filed return. If you receive a CP53E notice, review it promptly and make sure you understand why it was issued before taking action.
Your Windes tax advisor can help you review the notice, understand any adjustments made to your return, and determine the appropriate next steps. Contact your Windes advisor if you have questions about a CP53E notice or other IRS correspondence.
