Millions Of Taxpayers May Be Eligible For Refunds
COVID-19 was a dark time for many people, but their may be a beacon of hope for some regarding tax refunds.
Millions of Americans could potentially be entitled to refunds from the Internal Revenue Service (IRS) related to penalties and interest charged during the pandemic. Taxpayers have until July 10, 2026, to file claims for potential refunds, according to tax experts and recent court rulings.
The opportunity stems from a legal decision, Kwong v. United States, which clarified that federal tax deadlines were automatically postponed during the COVID-19 national emergency. That period ranged from January 20, 2020 through May 11, 2023. Because of the postponement, the IRS may have lacked authority to assess certain penalties or interest during that period.
Who Is Eligible?
Eligibility extends to anyone charged penalties or interest on federal tax obligations during the covered period. This includes individuals, small businesses, and larger companies that may have faced late-payment or late-filing fees.
The refunds could include interest that accrued on unpaid balances, as well as penalty charges that were applied while the pandemic effectively extended filing and payment deadlines.
The IRS has not yet issued formal guidance on processing these claims, however. Experts recommend carefully documenting all relevant charges, maintaining records of payments, and filing claims in accordance with IRS instructions.
Taxpayers are encouraged to examine their records to see whether the IRS imposed any penalties or interest during the pandemic filing pause, Jon Wasser, partner at Fox Rothschild who focuses on tax issues, told USA Today. They can do this by contacting a tax professional or reviewing their IRS tax transcript.
What Should Eligible Taxpayers Do Next?
Eligible taxpayers can file IRS Form 843, “Claim for Refund and Request for Abatement,” citing the Kwong decision and the automatic suspension of deadlines. IRS records, including tax account transcripts, can help individuals confirm whether they qualify.
This refund opportunity is separate from other pandemic-era tax credits or unemployment compensation exclusions, which have their own rules and deadlines. Taxpayers are encouraged to act quickly to avoid missing the July 10 deadline.
The independent National Taxpayer Advocate (NTA) is urging eligible Americans to act quickly before that date.
“Many taxpayers affected by this issue have low and moderate incomes,” NTA said in a blog post. “These taxpayers are less likely to have professional representation and to learn about complex legal developments like this one. As a result, they face a greater risk of missing the opportunity to claim refunds to which they may be entitled.”
