Sponsors (4)
The bill accelerates and secures replacement tax refunds by prioritizing direct deposit—improving speed, fraud risk, and IRS efficiency—at the cost of potentially excluding unbanked taxpayers and imposing near-term regulatory burdens and verification risks on the IRS.
Taxpayers who lost refunds or had refund checks stolen can receive replacement refunds faster and more securely via direct deposit instead of waiting for paper reissues.
Taxpayers who would otherwise get paper checks face a reduced risk of mailed-check fraud or interception when replacements are sent by direct deposit.
Taxpayers and federal employees may see lower IRS administrative workload and costs because the IRS will reissue fewer paper checks and spend less effort tracking lost or stolen mailed payments.
Unbanked or underbanked taxpayers who lack access to direct-deposit accounts may be unable to use the faster replacement option and will still rely on paper checks.
Taxpayers could face misdirected or fraudulent payments if the IRS's required verification and security procedures for electing direct deposit are insufficient or poorly implemented.
Requiring the IRS to draft and implement regulations within six months creates an administrative workload and short-term costs for IRS staff.
Based on analysis of 2 sections of legislative text.
Requires Treasury to allow taxpayers to elect direct deposit for replacement refund checks lost or stolen and issue regulations within six months.
Official title: To amend the Internal Revenue Code of 1986 to allow taxpayers to elect to receive certain replacement refunds electronically.
Introduced February 10, 2025 by Nicole Malliotakis · Last progress April 1, 2025
Requires the Treasury to create rules so taxpayers whose original refund checks were lost or stolen can choose to receive replacement refunds by direct deposit instead of a paper check. The Treasury must issue those regulations within six months of enactment, and the change takes effect on the date the law is enacted. This is a procedural change to tax-refund processing intended to reduce paper check risk and speed payments by allowing taxpayers to elect electronic delivery for replacement refunds.