Millions May Qualify for IRS Penalty Refunds Before July 10, 2026
Update – June 2026: Since the publication of this article, the federal court decision in Kwong v. United States has clarified that certain IRS penalties and related interest assessed during the COVID-19 emergency period may have been improperly charged. Taxpayers and businesses seeking refunds or relief must submit their claims no later than July 10, 2026. Please review our important update below for additional information, filing requirements, and recommended contact deadlines.
During the COVID-19 federal disaster declaration, which remained in effect from January 20, 2020, through May 11, 2023, many tax filing and payment deadlines were postponed. Despite those extensions, numerous taxpayers were still charged penalties and interest that may not have been legally applicable.
Subsequent court rulings, including the Kwong decision, have confirmed that these extended deadlines could invalidate certain late-filing and late-payment penalties, as well as the interest associated with them.
What This Could Mean for Taxpayers
Individuals and businesses that filed returns or made tax payments during the COVID period may qualify for relief, including:
- Refunds of late-filing and late-payment penalties
- Reduction or removal of related interest charges
- Additional interest that may be owed on amounts refunded
This relief is not automatic, and eligible taxpayers must take action to preserve their rights.
Filing Deadline
Taxpayers seeking a refund or abatement will generally need to submit Form 843, Claim for Refund and Request for Abatement.
Deadline to file a claim: July 10, 2026
Currently, the IRS requires these claims to be submitted by paper. Sending the filing by certified mail is strongly recommended to provide proof of timely submission.
Why This Is Important
The unprecedented length of the COVID-era disaster declaration created confusion regarding filing deadlines and the proper assessment of penalties and interest. As a result, many taxpayers—and even some tax professionals—were unaware that these charges may have been improperly imposed.
Unless additional relief is provided by the IRS or Congress, affected taxpayers will need to determine their eligibility and file a claim before the deadline. Those who fail to act may permanently lose the opportunity to recover money that could rightfully be returned to them.