Sponsors (10)
The bill speeds and secures replacement tax refunds by shifting to electronic direct deposit—reducing lost checks and government processing costs—while creating risks for unbanked taxpayers, requiring short-term regulatory work by the IRS, and increasing reliance on accurate bank-account data.
Most taxpayers with bank accounts will get replacement tax refunds faster via direct deposit instead of waiting for a paper check, speeding access to funds.
Taxpayers receiving replacement refunds face lower risk of lost, stolen, or intercepted payments because funds are sent electronically rather than by paper check.
The IRS and Treasury will have lower administrative costs and processing burdens from issuing and reissuing replacement payments electronically rather than by paper checks.
Unbanked taxpayers and those without reliable bank access could be disadvantaged if paper-check alternatives are reduced or not provided, potentially causing delays or barriers to receiving replacement refunds.
Requiring the IRS to draft and implement regulations within six months could create short-term administrative strain and implementation costs for federal employees and Treasury, and transitional costs that may affect taxpayers.
Direct deposit requires taxpayers to provide accurate bank account information, creating a risk of misdirected payments if account details are incorrect or outdated.
Based on analysis of 2 sections of legislative text.
Allows taxpayers eligible for a replacement paper refund check to elect to receive that replacement amount by direct deposit, with Treasury regulations due in six months.
Requires the Treasury Department to create rules, within six months, that let taxpayers who are eligible for a replacement paper tax refund check choose to receive that replacement amount by direct deposit instead of a paper check. The change takes effect on the date the law is enacted and only applies to taxpayers eligible for a replacement paper refund check.
Introduced July 24, 2025 by Marsha Blackburn · Last progress July 24, 2025