IRS Notice CP53: What It Means and What to Do Next

In many cases, this notice is legitimate and often easily resolved. But there are also fraudulent versions circulating, so understanding what to look for is critical. We’ll break it down for you.

IRS Notice CP53 relates to issues with direct deposit information for your tax refund.

To comply with Executive Order 14247, the IRS has updated its systems to automatically review Form 1040, Line 35, where taxpayers provide bank account and routing numbers for direct deposit.

If that information is:

• Missing
• Incorrect
• Or rejected by a financial institution

…the IRS system may automatically generate a CP53 notice requesting updated information.

There are several variations of this notice, and the differences matter:

CP53A, CP53B, CP53C, CP53D

These versions typically mean:

• The IRS attempted a direct deposit, but
• The deposit was rejected by the bank

Each version corresponds to a specific type of rejection.

CP53E

This version is a bit different:

• It is issued when the IRS believes bank information is missing
• However, there are reports that some taxpayers received CP53E in error, even when no refund was requested

Bottom line: Receiving a CP53E unexpectedly is not automatically cause for concern.

Here’s how to quickly determine your next step:

If you were NOT expecting a refund:

• No action is required

If you ARE expecting a refund:

You have two options:

Option 1: Update Direct Deposit Information

• Log into your IRS account using ID.me
• Provide or correct your banking details
• Follow the instructions outlined in your notice

Option 2: Wait for a Paper Check

• If you choose not to update your information
• The IRS will issue a paper check refund
• Timeline: approximately 10 weeks
  • (6 weeks after the 30-day response window expires)

Keep in mind: The IRS is moving away from paper checks in the future as part of federal payment modernization efforts so direct deposit will be required in the upcoming years.

Unfortunately, scammers are taking advantage of this situation.

Fraudulent CP53 notices have been reported and may include:

• Links to websites not ending in IRS.gov
• Suspicious phone numbers
• QR codes leading to scam sites
• Requests for payment via gift cards
• Requests to respond via email or text message

The IRS does not initiate contact via email, text, or social media. If something feels off, trust that instinct and don’t click or respond.

IRS Notice CP53 is largely tied to direct deposit verification issues, not audits or penalties. In many cases, it’s simply a request for clarification or correction.

That said, the rise in fraudulent notices makes it more important than ever to proceed carefully. If you’ve received a CP53 notice and aren’t sure what to do next, connecting with a trusted advisor can save time and prevent costly mistakes.

Whether you’re an individual taxpayer or a business owner, IRS notices can feel overwhelming, especially when new processes and potential scams are involved.

At Froehling Anderson, our Minneapolis and St. Cloud, Minnesota based team of accountants helps clients:

• Understand IRS notices quickly and clearly
• Determine whether action is needed
• Navigate next steps with confidence
• Stay informed on evolving IRS procedures and regulations

While certain actions, like updating direct deposit through ID.me, must be completed by the taxpayer directly, we’re here to guide you every step of the way.

If you have questions about IRS Notice CP53 or any tax-related matter, connect with Froehling Anderson, your trusted advisor. We’re here to help!

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or audit advice. Please consult with your CPA for guidance tailored to your situation.