A federal court has handed taxpayers a potential refund along with a tight deadline to claim it.
In November 2025, the U.S. Court of Federal Claims ruled in Kwong v. United States that COVID-19 disaster relief suspended federal tax deadlines for far longer than the IRS allowed. Under the decision, filing and payment deadlines were paused for the entire declared disaster period, from January 20, 2020, through July 10, 2023. The IRS granted relief for only a few limited windows during that stretch.
The gap is worth real money. If those deadlines were postponed, then many filings and payments the IRS treated as late were on time. That would make the penalties and interest charged on them improper, and potentially refundable.
Who may be owed a refund
The COVID disaster declaration was nationwide, so nearly any U.S. taxpayer who paid one of these charges for tax years 2019 through 2022 may qualify:
- Failure-to-file penalties
- Failure-to-pay penalties
- Estimated-tax penalties
- Interest on unpaid tax
Individuals, business owners, trusts, estates, and nonprofits can all qualify. Two groups tend to have the most to recover. The first is businesses that owed a lot and paid late, because penalties and interest are figured as a percentage of the tax owed, so a large balance produces a much larger charge. The second is businesses that claimed the Employee Retention Credit (a COVID-era payroll tax break). Claiming the credit meant amending 2020 or 2021 returns, which raised the tax due, and the IRS often added late-payment penalties and interest on that extra amount. Because Kwong found those returns were not due until July 2023, those charges may have been improper.
Why this is not a guaranteed refund
The government has appealed Kwong to the U.S. Court of Appeals for the Federal Circuit, and a reversal is possible. Until the appeal is resolved, the IRS is not issuing these refunds automatically, and it may hold or deny claims in the meantime.
That uncertainty is why many tax professionals recommend a protective claim. Filing one now preserves your right to a refund if the ruling stands, at little cost. Wait, and if the decision holds, the deadline may pass before you act and the refund is gone for good.
How to claim it before July 10, 2026
For most taxpayers, the deadline to file is July 10, 2026. The process is deliberate, so starting early matters.
- Pull your IRS account transcripts for 2019 through 2023 at IRS.gov. They show every penalty and interest charge and the date it posted.
- Identify the charges assessed between January 20, 2020, and July 10, 2023. Those are the amounts that may be eligible.
- File Form 843, Claim for Refund and Request for Abatement. It must be signed by hand and mailed, and a separate form is generally required for each tax year and each type of charge.
Your exact deadline can vary depending on when you paid, so confirm the dates that apply to your own account.
Because the claim turns on careful transcript review and precise wording, many taxpayers have a professional prepare it. Pull your transcripts and look at those years. If the penalties and interest are significant, our firm can review your account and prepare and file the claim for you before the deadline. The window closes July 10, 2026, so it is worth checking now.
