Taxpayers May Request COVID-Era Tax Refund — But the Deadline Is July 10, 2026

You paid your taxes. Maybe late, maybe with penalties attached, but you paid. What if the IRS wasn’t supposed to charge you those penalties at all

That’s exactly what a federal court found. And it means tens of millions of Americans may be owed a refund. But there’s a hard deadline: July 10, 2026. After that, for most people, the window closes permanently.

Here’s what you need to know — and what to do before time runs out.

Key Takeaways: What Is Tax Amnesty?

• A federal court ruled the IRS wrongly charged millions of taxpayers penalties and interest during the COVID-19 disaster period (January 20, 2020 – July 10, 2023).
• Eligible taxpayers include individuals, small businesses, corporations, estates, and trusts — the pool is enormous.
• The deadline to file a refund or abatement claim is July 10, 2026. Miss it, and you likely forfeit your right to the money.
• Because the Kwong v. United States ruling is still subject to appeal, filing a protective refund claim now is the recommended move; it preserves your rights without waiting for the courts to settle the issue.
• Most claims are filed using Form 843. Pull your IRS tax account transcripts first to identify eligible charges.
• The IRS will not notify you. If you paid penalties or interest between 2020 and 2023, you need to take action yourself, ideally with professional help.

What the Court Actually Decided About COVID-19 Tax Penalties

In late 2025, the U.S. Court of Federal Claims issued a landmark ruling in Kwong v. United States. The court held that the IRS should not have assessed certain penalties and interest during the COVID-19 federal disaster period.

Here’s the short version: when President Trump declared a federal disaster in March 2020 under the Stafford Act, it triggered a provision of the tax code — IRC Section 7508A(d) — that automatically postponed federal tax deadlines. That postponement covered the entire COVID disaster period: January 20, 2020, through July 10, 2023.

The IRS largely ignored that provision. It kept charging late-filing penalties, late-payment penalties, underpayment interest, and estimated tax penalties as if the disaster declaration didn’t change anything.

Two federal courts — first the U.S. Tax Court in Abdo v. Commissioner (2024), then the Court of Federal Claims in Kwong — have now rejected that position. The National Taxpayer Advocate has called this “a major refund opportunity” and urged affected taxpayers to act before the deadline.

Who May Qualify for This COVID Tax Refund 2026

This isn’t a narrow carveout for a small group. The potential pool is enormous.

You may be eligible for a COVID penalty refund or abatement if, between January 20, 2020, and July 10, 2023, you were charged:

• Failure-to-file penalties — assessed when a return was filed after its due date
• Failure-to-pay penalties — charged when taxes weren’t paid by the deadline
• Estimated tax penalties — for underpaying quarterly estimated taxes
• Underpayment interest — interest that began accruing during the disaster period

Eligible taxpayers include individuals, small businesses, corporations, estates, and trusts. Because COVID-19 was a nationwide disaster, virtually all U.S. taxpayers meet the geographic eligibility requirement.

In fiscal year 2022 alone, the IRS assessed more than 12 million estimated-tax penalties and over 16 million failure-to-pay penalties. The scope here is broad, and the refund amounts can be significant.

What Is the Pandemic Era Tax Refund Deadline — and Why Does It Matter?

July 10, 2026.

That’s the date by which most affected taxpayers must file a claim for refund or abatement to preserve their rights.

The deadline is grounded in the standard statute of limitations for IRS refund claims under IRC Section 6511: generally, three years from the filing date. Because the Kwong ruling extended the COVID disaster period through July 10, 2023, the three-year clock from that date lands on July 10, 2026.

Miss it, and you likely forfeit your right to that money, even if the courts later fully uphold the Kwong decision.

One important note: if you paid your penalties or interest after July 10, 2023, you may have until two years from your payment date. But don’t assume that applies to you. Get your situation reviewed now.

Should You File Even Though the Case Is Still Being Litigated?

Yes — and here’s why.

The Kwong decision is not yet final. The government has indicated it intends to appeal. That process could take years. The real risk for taxpayers isn’t the outcome of the appeal but waiting too long to file anything at all.

That’s where a protective refund claim comes in.

A protective claim preserves your right to a refund while the legal issue is still being resolved. You’re essentially telling the IRS: “I’m filing this claim now to protect my rights under the Kwong ruling. I’ll supplement it when the law is settled.”

The National Taxpayer Advocate has specifically recommended this approach. Filing a protective claim costs you very little. Not filing could cost you everything you’re owed.

How to File a Protective Refund Claim with the IRS: The Basics

To request a refund or abatement of COVID-era penalties and interest, most taxpayers will use Form 843 — Claim for Refund and Request for Abatement.

Before you file, here’s what you’ll want to do:

1. Pull your IRS tax account transcripts. These show every penalty and interest charge assessed against you by year. You can request them through your IRS online account or by calling the IRS directly.
2. Identify charges assessed during the disaster period (January 20, 2020 – July 10, 2023). These are the amounts potentially eligible for a refund.
3. Complete Form 843 for each tax year and type of penalty involved. If filing as a protective claim, label it clearly: “Protective Refund Claim Pursuant to Kwong v. United States.”
4. File before July 10, 2026. If mailing, use Certified Mail with Return Receipt so you have documented proof of timely filing.

This process sounds straightforward. But the details matter a lot. The wrong form, a missing tax year, or an incomplete explanation can derail a legitimate claim. If you’re owed a meaningful amount, professional representation is worth it.

The IRS Isn’t Going to Reach Out to You

Let’s be direct about something: the IRS is not sending notices about this. They’re not going to remind you that you may be owed money. As the National Taxpayer Advocate warned, without IRS or Congressional action, the people who benefit from this ruling will be the well-advised, not the unaware.

That’s an unfair outcome. And it’s exactly why the word needs to get out now.

If you paid tax penalties or interest at any point between 2020 and 2023, there’s a real chance you’re owed a refund. You won’t know until you look.

Don’t Wait to Find Out Where You Stand

At Lothamer Tax Resolution, our team of Enrolled Agents and licensed tax professionals has been reviewing COVID-era tax accounts and helping clients file protective claims ahead of the July 10 deadline. We know how to read IRS transcripts, identify eligible amounts, and put together a claim that holds up.

We’ve been fighting for everyday taxpayers since 1978 — in audits, on levies, and in negotiations with the IRS. This situation is no different.

The sooner you get your account reviewed, the more options you have. Start with a free consultation. We’ll tell you honestly whether you have a claim worth pursuing and exactly what the next step looks like.

You can be free from this. We can help. Contact Lothamer Today

Frequently Asked Questions

What is the COVID tax refund deadline in 2026?

Most taxpayers must file a claim for refund or abatement of COVID-era IRS penalties and interest by July 10, 2026. This deadline is based on the three-year statute of limitations measured from July 10, 2023 — the end of the COVID disaster postponement period established in Kwong v. United States.

Who qualifies for a COVID penalty refund from the IRS?

Individuals, small businesses, corporations, estates, and trusts that were assessed failure-to-file penalties, failure-to-pay penalties, estimated tax penalties, or underpayment interest between January 20, 2020, and July 10, 2023, may qualify. Because COVID-19 was a nationwide disaster, most U.S. taxpayers meet the geographic eligibility requirement.

What is Kwong v. United States?

Kwong v. United States is a November 2025 ruling by the U.S. Court of Federal Claims holding that IRC Section 7508A(d) automatically postponed federal tax deadlines during the COVID-19 disaster period. The court found the IRS improperly assessed certain penalties and interest during that window, potentially entitling millions of taxpayers to refunds or abatements.

What form do I use to claim a COVID tax penalty refund?

Most taxpayers will use Form 843 — Claim for Refund and Request for Abatement. Since the Kwong decision is still subject to appeal, tax professionals recommend filing a protective claim labeled “Protective Refund Claim Pursuant to Kwong v. United States” to preserve your rights before the July 10, 2026, deadline.

What is a protective refund claim?

A protective refund claim is filed before the statute of limitations runs out, while the courts are still resolving an underlying legal issue. It preserves your right to a refund without requiring you to know the exact amount yet. It’s the recommended approach given that Kwong is currently subject to appeal.

Sources

• U.S. Court of Federal Claims, Kwong v. United States, 179 Fed. Cl. 382 (November 2025)
• U.S. Tax Court, Abdo v. Commissioner, 162 T.C. 148 (2024)
• National Taxpayer Advocate Erin M. Collins, NTA Blog Series on COVID-19 Disaster Relief Refunds (April–May 2026): taxpayeradvocate.irs.gov
• Internal Revenue Code § 7508A(d) — Postponement of Deadlines by Reason of Federally Declared Disaster
• Internal Revenue Code § 6511 — Limitations on Credit or Refund
• IRS Form 843, Claim for Refund and Request for Abatement: irs.gov