A new federal audit of the 2026 tax filing season found an unusual split in refund sizes. Taxpayers who never gave the Internal Revenue Service a bank account for direct deposit, and instead waited on a mailed paper check, received refunds that averaged $5,624. The much larger group of filers who used direct deposit averaged $3,698. The difference, about $1,926, means the slower refund method paid out the bigger amount on average this year, which is a reversal of the pattern from a year earlier.
What the IRS Refund Data Actually Shows
The finding comes from the Treasury Inspector General for Tax Administration, the independent watchdog that audits IRS operations. TIGTA issues an interim look at each filing season partway through the year specifically so refund delays, processing backlogs, or fraud risks can surface before the IRS closes out the season. In its interim report on the 2026 filing season, the watchdog found that as of March 4, 2026, 39.2 million returns carried a direct-deposit account on file and averaged a $3,698 refund, while 800,000 returns had no bank account on record and averaged $5,624 instead, a gap of $1,926 per filer.
The two groups are far from equal in size. Of the roughly 40 million refunds in this snapshot, only about 2 percent, the 800,000 filers without a bank account on file, received their money by paper check. The other 98 percent, 39.2 million filers, banked their refund electronically. Yet it was that small paper-check minority that walked away with the larger average dollar amount.
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How the Pattern Flipped From a Year Earlier
A year earlier, the relationship ran the other way. TIGTA’s figures for the 2025 filing season show 37.1 million direct-deposit filers averaging $3,420, while 2.3 million filers without a bank account on file averaged just $2,781, a smaller refund, not a larger one. In other words, the normal pattern in 2025 was for the paper-check group to trail behind, and 2026 flipped that relationship entirely.
The size of the no-bank-account group also shrank sharply, from 2.3 million filers in 2025 to 800,000 in 2026, a drop of roughly 65 percent in a single year. Whether that reflects tighter IRS controls on refund fraud, wider adoption of banking apps, or simply fewer taxpayers opting for a mailed check is not something the report spells out. Either way, it leaves a smaller, and apparently different, group of filers still receiving refunds without direct deposit on file.
Why a Paper Check Might Come With a Bigger Number
The IRS has long processed some returns more slowly than others, and those delays tend to cluster around specific situations: returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit, which by law cannot be paid out before mid-February regardless of when they were filed, returns flagged for identity verification, and returns with self-employment income or other items that take longer to reconcile. Filers caught in any of those categories are also more likely to be among the smaller group still receiving a paper check rather than direct deposit. Older filers who have never banked through a mobile app, first-time filers still building a banking history, and filers using an Individual Taxpayer Identification Number instead of a Social Security number are also more likely to lack a routing and account number on file, for reasons that have nothing to do with the size of their refund.
None of that proves cause and effect on its own. But a shrinking, more unusual pool of paper-check filers, combined with credits and corrections that tend to run larger dollar amounts, is a plausible explanation for why this year’s average swung the way it did.
The Real Cost of Skipping Direct Deposit
Direct deposit remains the overwhelming default for a reason. The IRS says eight out of ten taxpayers already receive their refunds that way, and that combining direct deposit with electronic filing is the fastest route to a refund, with more than nine in ten refunds arriving in under 21 days. The IRS’s own guidance also puts a number on the cost difference: a paper refund check costs the government more than $1 to issue, against roughly a dime for each direct deposit.
That cost gap is one reason the IRS keeps steering filers toward direct deposit, even for those who file on paper. It does not explain why this particular year’s paper-check group had bigger refunds, but it underscores how small and unusual that group has become relative to the tens of millions who bank their refund electronically.
The Choice Every Filer Still Has to Make
Every filer, regardless of how complicated the return, can choose direct deposit, and can split a refund among up to three accounts using IRS Form 8888, even when filing on paper. The choice is not automatic. A filer has to actively enter routing and account numbers on the return, and anyone who leaves that section blank, or who does not have a bank account to list, defaults to a mailed check.
TIGTA’s interim report on the 2026 filing season notes that the pool of filers without direct deposit on record has fallen sharply, from 2.3 million a year earlier to 800,000 this year, even as their average refund grew larger than the group banking electronically.
Inside the kit
A notice decoder, the refund-trace steps for Form 3911, a refund status tracker spreadsheet and the 3-year refund deadline.
The IRS Refund Recovery Kit includes a 13-page kit, a notice decoder and the refund-trace steps (Form 3911).
Open The IRS Refund Recovery Kit.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
