Tens of millions of Americans are at risk of missing a deadline to claim a potential IRS refund tied to the COVID-19 pandemic, according to the independent National Taxpayer Advocate.
Taxpayers may be owed refunds for penalties and interest charged during the federally declared disaster period, which ran from January 20, 2020, through May 11, 2023. The deadline to file a protective claim is July 10, 2026.
What Is the Refund Based On?
The opportunity stems from a federal court ruling in Kwong vs. United States. The court found that a rule allowing tax deadline extensions during a federally declared disaster plus 60 days also prohibits the IRS from charging penalties or interest on taxes due during that period. The IRS disagrees with the ruling and is expected to appeal, but taxpayers must file now to preserve their right to a refund if it prevails.
Who Is Eligible?
A broad group is affected, including individuals, small businesses, large corporations, estates, and trusts. The issue applies to income, employment, estate, gift, and excise taxes-and can also impact late international information returns, which often carry steep penalties even when no tax is owed.
How to Check and File
Taxpayers should review their IRS tax account transcripts for any penalties or interest assessed between January 2020 and July 2023. Transcripts are available online through the IRS Individual Online Account or by calling 800-908-9946.
If a refund is owed, file a claim using IRS Form 843. Specify that it is a protective claim based on the Kwong vs. United States decision. Claims must be filed by paper; the NTA advises sending them by certified mail to ensure proof of timely submission.