Most taxpayers who paid penalties or interest during the COVID-19 pandemic must file a claim by July 10, 2026, to protect their right to a potential refund. Recent legal developments, specifically the case of Kwong v. United States (“Kwong”), suggest that certain IRS assessments made approximately between January 20, 2020, and July 10, 2023, as interpreted in Kwong.
Why You Need to Act Now
The U.S. Court of Federal Claims ruled that the COVID-19 disaster declaration automatically extended many tax deadlines, meaning the IRS may have incorrectly charged late-filing or late-payment penalties. However, these refunds are not automatic.
- The Deadline: You generally have until July 10, 2026 to file your claim.
- The Risk: If you do not file by this date, you may lose your right to a refund even if the court ruling is fully upheld later. The IRS is appealing and is not currently issuing Kwong-based refunds. Protective claims preserve rights if the position is ultimately upheld.
- The Solution: File a formal claim (if you know the exact amount) or a protective claim (if the final amount is still uncertain due to ongoing litigation).
| Claim Type | When to Use | Key Requirement |
| Formal Claim | Use if you have identified the exact penalty/interest amount you want back. | Must state the specific dollar amount and reasons for the refund. |
| Protective Claim | Use while the law is still being litigated to keep the “statute of limitations” clock from running out. | Identify the “Kwong case” as the contingency and specify the tax years affected. |
How to Protect Your Refund
- Check Your Transcripts: Log into your IRS Individual Online Account to review your 2019–2022 tax year transcripts for any penalties or interest charged.
- Use Form 843: Both formal and protective claims are filed using IRS Form 843.
- Label Your Claim: For protective claims, write “Protective Refund Claim Pursuant to Kwong Case” at the top of the form.
- Mail via Certified Mail: Ensure you have proof of mailing before the July 10, 2026, deadline.
Frequently Asked Questions
- Who is eligible for these refunds?
Tens of millions of taxpayers—including individuals, small businesses, and estates—who were charged penalties or interest for late filing or payment during the disaster period (Jan 20, 2020 – July 10, 2023) may qualify. - What if I already paid my penalties?
You can still file for a refund of those paid amounts. If you were assessed penalties but have not paid them yet, you can use Form 843 to request an abatement (removal) of the charges. - Is there an online filing option for this claim?
No, Form 843 generally must be paper-filed and mailed to the IRS. - Why is the deadline July 10, 2026?
This date is three years after the legally recognized end of the COVID-19 disaster relief period (July 10, 2023). - Do I need to know the exact refund amount to file?
Not for a protective claim. A valid protective claim preserves your rights as long as it identifies the tax years and the specific legal contingency (the Kwong case).
The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.
