Paid IRS Penalties or Interest During COVID-19? Some Taxpayers May Need to File by July 10, 2026

The National Taxpayer Advocate recently warned that some taxpayers who were charged IRS penalties or interest during the COVID-19 federal disaster period may have an opportunity to request a refund or abatement.

The issue comes from the Kwong v. United States case and its interpretation of disaster-related deadline postponement rules. Under that reasoning, certain filing and payment deadlines during the COVID-19 federal disaster period may have been postponed until July 10, 2023. As a result, some penalties and interest assessed for filings or payments treated as late during that period may need to be reviewed.

Who Should Pay Attention?

Taxpayers who may want to review their records include:

• Individuals or businesses that filed late during the COVID-19 period and were charged IRS penalties
• Taxpayers charged failure-to-pay penalties, estimated tax penalties, or related interest
• Taxpayers who already paid penalties or interest and want to preserve a potential refund claim
• Taxpayers who received IRS notices but have not confirmed the penalty type, year, or source

This relief is generally not automatic. Many affected taxpayers may need to file a refund claim or protective claim by July 10, 2026, to preserve their rights.

What Taxpayers Can Do

A practical first step is to review IRS Tax Account Transcripts for the relevant years and identify penalty, interest, or adjustment entries. If there are potentially eligible amounts, taxpayers may consider filing Form 843 to request a refund or abatement.

The National Taxpayer Advocate notes that Form 843 generally must be filed on paper and mailed to the IRS. For protective claims, taxpayers should clearly identify the tax year, the penalties or interest involved, and the connection to the Kwong issue.

Jiahua Reminder

These claims depend on the tax year, tax type, penalty category, payment date, and the taxpayer's IRS account records. Taxpayers should not rely on headlines alone to decide whether they qualify. It is better to gather IRS notices, account transcripts, payment records, and tax returns before deciding whether to file Form 843 or another supporting statement.

The legal issue may continue through appeals, so the final result remains uncertain. Taxpayers should also be cautious of anyone promising a guaranteed refund or requesting sensitive information without clearly explaining the legal basis for the claim.

Source

National Taxpayer Advocate: Protect Your Potential COVID-19 Disaster Relief Refunds

National Taxpayer Advocate: Tens of Millions of Taxpayers May Be Eligible for Refunds