By John T. Murray, CPA, Partner
Why taxpayers are receiving unexpected IRS refund notices
Some taxpayers are receiving IRS Notice CP53E unexpectedly this filing season, creating confusion for individuals who either owed with their 2025 return or anticipated a refund but did not provide direct deposit information. The notice requests banking information so the IRS can issue a refund electronically.
The circumstances around the notice have led many taxpayers to question whether it is real and what action, if any, they should take.
Why taxpayers are receiving Notice CP53E
According to the IRS, Notice CP53E is issued when the agency needs additional banking information to process a direct deposit refund. In many cases, taxpayers were not expecting a refund at all. Notices have also been issued to taxpayers who were already expecting refunds but did not include direct deposit information on their original tax return.
Tax professionals believe some notices are tied to IRS recalculations of penalties and interest, including adjustments related to disaster relief provisions and underpayment penalty relief. As a result, some taxpayers who originally owed a balance may now qualify for a refund.
The increased use of these notices aligns with broader federal efforts to modernize payment processing and expand electronic payment usage across government agencies.
The IRS continues to encourage electronic filing and direct deposit as a part of a broader government effort to modernize payment processing. IRS News Release IR-2026-43 and Fact Sheet FS-2026-02 both highlight the federal push toward electronic payments, which may result in more IRS notices requesting direct deposit information for refunds and other payments.
What taxpayers should do
Taxpayers who receive Notice CP53E should carefully review the notice and respond through the official IRS website if they choose to provide banking information electronically. The IRS recommends using an Individual Online Account to securely submit direct deposit details within 30 days of receiving a notice.
If no action is taken, the IRS will issue a paper check six weeks after the notice date.
Taxpayers who receive Notice CP53E should:
- Verify the notice was issued by the IRS
- Avoid responding through links received by email or text message
- Access IRS resources directly through gov
- Consult with a tax advisor if they are unsure why they received a notice
Scam notices are circulating
Tax professionals and IRS have warned that scammers are using the confusion surrounding CP53E notices to distribute fraudulent versions designed to collect sensitive financial information.
Taxpayers should never provide banking information through unofficial websites or unsolicited communications. Legitimate IRS notices direct taxpayers to official IRS.gov resources.
Navigating Notice CP53E
Although receiving an unexpected refund notice may be surprising, many CP53E notices are legitimate and connected to IRS account adjustments or expanded electronic payment initiatives. Taxpayers should take time to verify the notice, understand why it was issued, and respond only through official IRS channels.
If you have questions about a CP53E notice or have questions understanding changes to your IRS account, contact your Keiter Opportunity Advisor | 804.747.0000
About the Author
John T. Murray, CPA, Partner
John provides customized insights and opportunities for fund managers and their clients, and fund administrators in areas such as fund formation and wind-down, tax structuring, complex tax allocations, Series Funds, Fund of Funds, Long-short Funds, Venture Capital Funds, Real Estate Funds and Hedge Funds.
He serves as the tax leader for Keiter’s Financial Services Industry team and is a member of the Mergers & Acquisitions team.
More Insights from John T. MurrayThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
