Taxpayers who paid penalties or interest to the Internal Revenue Service during the COVID-19 pandemic may have a limited time to claim a refund or abatement, experts warn, as a key deadline approaches on July 10, 2026.

The deadline stems from a November 2025 ruling by the U.S. Court of Federal Claims in the case Kwong v. United States, which addressed how tax filing and payment deadlines should be treated during federally declared disasters. The court determined that IRS deadlines for filing and payments were postponed during the pandemic period—from January 20, 2020, through May 11, 2023—plus an additional 60 days, effectively extending final deadlines to July 10, 2023. As a result, penalties and interest related to late filings or payments during this window should not have been assessed until after that date.

National Taxpayer Advocate Erin M. Collins has underscored the potential implications of the ruling, noting that tens of millions of taxpayers—including individuals, small businesses, corporations, estates, and trusts—may be eligible for financial relief in the form of refunds or reductions of penalties and interest previously imposed by the IRS during the pandemic.

To benefit from this decision, taxpayers must file a refund claim within the standard time limits, generally three years from the date of filing a return or two years from the date of paying the tax owed. Because the court’s deadline calculation centers on July 10, 2023, the July 10, 2026 deadline represents the last day for most taxpayers to submit a claim. Missing this deadline could result in the permanent forfeiture of any refund, even if courts later rule in favor of taxpayers.

The claims pertain specifically to late-filing penalties, late-payment penalties, penalties for failure to make required estimated tax payments, and any interest that accrued during the deferred deadline period. Reports indicate the IRS assessed over $18.5 billion in additional taxes for late returns in fiscal year 2021 and nearly $23.8 billion in fiscal year 2022, highlighting the scale of potential refunds.

Taxpayers seeking redress must file IRS Form 843, “Claim for Refund and Request for Abatement.” While the form traditionally required mailing, the IRS recently introduced an online submission tool for individual taxpayers with IRS online accounts. Through the IRS website, eligible users can access the mobile-friendly form, submit claims citing Kwong v. United States, and receive electronic confirmation of their submissions. For joint filers, both spouses must have online accounts to file electronically.

Those who cannot submit claims electronically must mail the form postmarked by July 10. Experts advise including a clear reference to the Kwong case on the form and using certified mail with return receipt to provide proof of timely filing.

Collins has produced a series of explanatory posts guiding taxpayers through the process, including reviewing IRS transcripts to identify assessed penalties, differentiating between formal and protective refund claims, and highlighting potential additional refunds related to stimulus payments or refundable credits. She stresses that while filing a claim does not guarantee approval, submitting a timely claim preserves the opportunity for relief as legal proceedings continue.

The ruling and ongoing guidance come amid ongoing recovery efforts, with many taxpayers still coping with the financial impacts of the pandemic. Taxpayers are urged to review their situations promptly and take action before the July 10 deadline to secure potential refunds related to this unprecedented period.