Millions may qualify for 'significant' IRS refunds from COVID-era, but deadline looms: Advocate – Image for illustrative purposes only (Image credits: Unsplash)
Tens of millions of Americans stand to recover significant sums from the IRS in the form of refunded penalties and interest tied to the COVID-19 era. Recent federal court rulings have clarified that filing and payment deadlines during the pandemic’s federal disaster period effectively extended far longer than many realized, shielding taxpayers from late fees.[1][2] The National Taxpayer Advocate Service warns that most must file claims by July 10, 2026, to secure this relief, a cutoff that could leave billions unclaimed otherwise.
Court Rulings Reshape Pandemic Tax Deadlines
A pivotal decision in Kwong v. United States, issued in November 2025, interpreted tax law to postpone deadlines across the entire COVID federal disaster period.[1] That period spanned from January 20, 2020, through May 11, 2023, with an additional 60 days pushing the effective end to July 10, 2023. The court held that returns and payments due within this window were not late until after that final date, invalidating many penalties assessed earlier.
The IRS had taken a narrower view, leading to assessments on failure-to-file, failure-to-pay, and estimated payment penalties, plus premature interest accrual. National Taxpayer Advocate Erin M. Collins highlighted this in a recent blog post, noting the ruling’s broad implications.[1] The Department of Justice plans to appeal, which could prolong uncertainty, but taxpayers cannot wait for resolution.
Who Stands to Benefit from These Refunds
A wide array of taxpayers qualify, from individuals grappling with personal returns to small businesses, large corporations, estates, and trusts.[3] Anyone hit with penalties for late filings, payments, or estimated taxes during 2020-2023 may seek refunds on those amounts already paid, or abatements on unpaid balances. Overpayment interest for the period could also apply.
Low- and moderate-income filers face particular risk of missing out, as they often lack professional advice amid these complex developments. Collins emphasized this disparity: “Many taxpayers affected by this issue have low and moderate incomes. These taxpayers are less likely to have professional representation and to learn about complex legal developments like this one.”[1] Nevada residents, like others nationwide, should review notices and transcripts for assessments from those years.
Steps to File a Claim and Preserve Your Rights
Relief requires action through Form 843, Claim for Refund and Request for Abatement, submitted on paper – no electronic option exists yet.[2] Taxpayers must mail it by certified mail to prove timeliness, given processing delays and lack of confirmations. For those unsure of exact amounts amid ongoing litigation, protective claims suffice: label it “Protective Refund Claim Pursuant to Kwong Case,” describe the issue, and list affected years.
- Download Form 843 from IRS.gov.
- Detail penalties, interest, or overpayments from the disaster period.
- Send via certified mail; track the deadline of July 10, 2026.
- Consult a tax professional for open audits or complex cases.
The IRS will suspend protective claims until courts rule definitively. Those in exams or appeals might negotiate adjustments without new filings.
Challenges Ahead and Calls for Systemic Fixes
Paper-only submissions pose hurdles, especially for millions potentially filing at once, straining IRS resources. Collins warned of uneven outcomes: “Without action, this situation may well produce dramatically different outcomes for the ‘well advised’ versus the ‘unaware.’”[1] She urged the IRS to publicize widely, enable e-filing, grant automatic relief, and extend the deadline by six months.
Congress could intervene legislatively, but no such steps have materialized. Tax pros and media play key roles in spreading awareness to everyday filers in places like Las Vegas and across Nevada.
As the July 10 clock ticks, proactive steps now could deliver real financial relief from pandemic-era burdens. Taxpayers who dig into their records stand the best chance of avoiding permanent forfeiture, ensuring the tax system serves all equally.
