Recently, there has been a significant increase in clients receiving IRS Notice CP53E, which states that their 2025 Form 1040 refund could not be deposited into their bank account. However, in many cases, a refund was not due to the taxpayer receiving the notice.

It appears that many of these notices are legitimate but are being sent in error by the IRS. While this situation has created confusion, it has also unfortunately created an opportunity for scammers to take advantage of the situation. Here is what you need to know about CP53E notices, how to proceed if you receive one, and what to be aware of to protect yourself from fraud.

Understanding IRS CP53E notices

Under normal circumstances, the IRS sends these notices when a taxpayer is due a refund, but their direct deposit fails due to incorrect or missing banking information. The notice instructs the taxpayer on how to correct the issue so the refund can be reissued. The IRS typically provides the taxpayer with 30 days to update their information within their IRS Online Account, but if no action is taken, the IRS will often provide a paper check within six weeks.

However, the pattern of individuals who are not owed a refund receiving these notices suggests the possibility of an IRS processing error affecting a broader group of taxpayers.

Increased risk of fraud

As is often the case, scammers have already been quick to exploit the confusion around these notices. Scammers are already fraudulently replicating these letters, which include links to fake websites that are designed to collect sensitive financial information, such as bank account details. These fraudulent versions can look very convincing and may pressure recipients to act quickly.

Protecting yourself and your information

If you receive a CP53E notice that indicates a failed direct deposit, take a cautious and measured approach by:

• Not acting immediately. If you were not expecting a refund, the notice may have been sent in error.
• Avoiding clicking links or scanning QR codes included in the letter, as these could be fraudulent in nature.
• Going directly to the source. Rather than following embedded links, you can either go directly to www.irs.gov and search for your online account, or you can call the IRS directly.
• Verifying your tax information. Review your 2025 filed return and IRS account to confirm whether a refund was issued or is still pending.
• Being wary of unsolicited contact. The IRS does not reach out via phone, email, or text to request banking information. If you receive a communication like this, it is not the IRS.

When to act

If you confirm that you are legitimately owed a refund and there was an issue with direct deposit, follow the instructions through your official IRS Online Account. However, if no refund is due, the best action is to simply disregard the communication.

Final thoughts

While it appears that some of these notices may be the result of an administrative error, the situation underscores the importance of remaining vigilant. Taking a moment to verify the legitimacy of any IRS communication can help prevent unnecessary stress, and more importantly, protect you from potential fraud.

If you receive a CP53E notice and have questions about how to proceed, we are here to help. Please contact your Client Relationship Manager or use the form below for assistance.