Tens of millions of Americans could reclaim IRS penalties and interest from the COVID era, but their window slams shut on July 10, 2026.
Story Snapshot
- Tens of millions of taxpayers qualify for refunds due to postponed deadlines from January 20, 2020, to May 11, 2023.
- Federal court Kwong ruling exposed IRS errors in assessing penalties and interest during the disaster period.
- Claims require paper Form 843 by certified mail; no automatic relief exists.
- Justice Department may appeal, adding uncertainty to the opportunity.
- National Taxpayer Advocate urges action before the fast-approaching deadline.
COVID Disaster Declaration Postponed Deadlines
The federal government declared a COVID-19 disaster from January 20, 2020, to May 11, 2023. Tax code provisions automatically postponed filing and payment deadlines nationwide.
The IRS ignored these rules and assessed penalties for late filings, payments, and estimated tax payments. Interest accrued prematurely or wrongly during this 3.5-year span. Taxpayers paid these charges, unaware of the legal protections.
Kwong Court Ruling Triggers Refund Eligibility
Federal courts ruled in the Kwong case, in late 2025 or early 2026, that IRS assessments violated disaster declaration laws. Penalties for failure to file returns, pay taxes, or make estimated payments become invalid.
Interest charges that started too early or should not have applied qualify for abatement. Overpayment interest from 2020 to 2023 also falls under relief. This decision binds the IRS to refund affected parties.
National Taxpayer Advocate Issues Urgent Notice
The IRS internal watchdog, National Taxpayer Advocate, released a notice on Thursday, May 4, 2026. It alerts tens of millions to their eligibility without the IRS or Congress providing automatic fixes. Taxpayers must file individual claims.
The advocate highlights the risks of paper filing and recommends certified mail as proof.
Tens of millions of American taxpayers may be entitled to refunds or reduced penalties and interest due to delayed filing deadlines during the COVID-19 emergency declaration. https://t.co/W6tnwKRwqK
— FOX6 News (@fox6now) May 2, 2026
Filing Requirements Demand Immediate Action
Affected taxpayers submit Form 843 on paper, not electronically. Mail to IRS by July 10, 2026, or forfeit refunds. No electronic option burdens filers with delays and uncertainty. Certified mail provides evidence of receipt if the forms vanish. IRS processes surge as the deadline nears.
Tens of millions of taxpayers may be owed IRS refunds from COVID-erahttps://t.co/yYIC1KSVbp
— Sabrina (@SabrinaNC10) May 3, 2026
Uncertainties Threaten Refund Outcomes
Justice Department considers appealing Kwong, potentially overturning relief. Congress could mandate automatic refunds, easing the burden on millions. IRS hesitates on proactive fixes amid administrative hurdles.
Exact numbers of affected individuals and dollar totals remain unspecified. Precedent shapes future disaster tax handling. Taxpayers act now or risk permanent loss in this high-stakes scramble.
Sources:
Tens of millions of taxpayers may be owed IRS refunds from COVID-era
Millions of Americans may qualify for COVID-era tax refunds, but the clock is ticking
Tens of millions of taxpayers may be owed IRS refunds from pandemic era: watchdog
