The 2026 regular tax filing season ended last month and many taxpayers have already received their refunds. But tens of millions of Americans may also be entitled to refunds of another kind – for tax penalties and interest collected during the Covid-19 pandemic.
According to National Taxpayer Advocate Erin M. Collins, the refunds are not guaranteed because they are based on a court decision that the government can still appeal. She leads a group within the Internal Revenue Service that works on behalf of taxpayers.
But to preserve your eligibility if the court ruling stands, you must file refund claims with the IRS by July 10, Ms. Collins said in blog posts aimed at making people aware of the situation. “At the heart of this matter are taxpayers who may be entitled to refunds but will never claim them,” she said in an email.
IRS data shows that many potentially affected taxpayers are low- and middle-income people who are less likely to seek professional tax help and learn about the possible refunds, Ms. Collins said. “For them, a refund is not just a technical tax adjustment,” she said. “It can make a real financial difference.”
Here’s what you should know about refunds.
Who is entitled to the possible refunds?
You may be eligible for a refund or waiver of certain penalties and interest levied by the IRS from January 20, 2020 through July 10, 2023. Penalties may include, but are not limited to, those imposed for filing a late tax return, failure to pay taxes, or failure to make estimated tax payments.
What led to this?
The refunds result from recent court cases, tax experts say, particularly Kwong v. United States, a lawsuit decided in the U.S. Federal Court, which hears financial claims against the government.
In November, the court found that under a law that went into effect at the start of the pandemic, the tax filing and payment deadlines should have been automatically postponed by the duration of the pandemic disaster declaration plus 60 days.
The disaster declaration began in early 2020 and lasted until May 11, 2023. The additional 60 days extended the period to July 10, 2023 for tax purposes. IRS rules generally allow taxpayers to claim a refund three years after filing a tax return, pushing the deadline to July 10, 2026.
President Trump, then in his first term, declared a nationwide emergency due to the coronavirus on March 13, 2020. The court found in the tax case that the relevant period began on January 20, 2020. At the time, Mr. Trump declared that the state of emergency began in California, where the plaintiff lived.
“Under the Court’s logic, the IRS should not have imposed penalties for late filing or payment or charged interest on those amounts during this 3.5 year period,” Ms. Collins wrote.
In the claims court’s decision, Judge Molly R. Silfen wrote that while disaster declarations often apply to local, short-term weather events, the pandemic was an “unprecedented and prolonged” national event. “Although Congress may not have anticipated a disaster declaration that would last longer than three years,” the judge wrote, “the express language of the statute still applies.”
Melanie Lauridsen, vice president of tax policy and advocacy at the American Institute of Certified Public Accountants, said the law was later revised and tax deadlines are now automatically extended for a maximum of 120 days from the start of a federally declared disaster. “Covid was an extreme example and the law has changed since then,” she said.
When could I get my money back?
People shouldn’t expect payments to be made quickly. The federal government is likely to appeal the court decision, and it could take years to resolve the matter, Ms. Collins said. If the government prevails, no refunds will be given.
Neither the IRS nor the Justice Department responded to a request for comment. Kenneth Kies, an assistant secretary at the Treasury Department, told The Associated Press that the Trump administration believes the Kwong case “was wrongly decided because it is a misinterpretation of the plain language of the law.”
“We will continue to defend the statutory language as written,” he said in a statement.
Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals, emphasized that the matter has not yet been resolved. “Taxpayers should not assume that claims will be automatically recognized,” he said in an email.
But they should think about taking action. The court decision creates a “credible” basis for challenging pandemic-era penalties and interest, Mr. O’Saben said, but “the real risk is waiting too long and losing the ability to even make that argument.”
How can I tell if I am affected?
Tax experts said taxpayers should review their federal income tax record, a document that summarizes taxes paid and any penalties and interest. Jessica Marine, a partner at Frost Law who specializes in tax matters, recommended reviewing report cards for the 2019 to 2022 tax years.
The quickest way to view your transcripts is to set up an individual IRS account, the agency says. You can set up an account on the IRS website using the ID.me service. (Be prepared to verify your identity using a photo of government-issued identification, such as your driver’s license, and a selfie, or through a live call with a video chat agent.)
If you cannot or do not want to create an online account, you can have transcripts mailed to you by submitting an application on the IRS website or by calling 800-908-9946. Delivery usually takes five to ten calendar days.
“In most cases, if you know how to read an IRS transcript, the amount should be easy to obtain,” Ms. Marine said.
Taxpayers sometimes find reading transcripts challenging, Ms. Collins said. She included an example in one of her blog posts highlighting how penalties and interest appear on a transcript.
What happens if I paid penalties or interest during the Covid emergency?
If your record confirms that you paid penalties or interest – or that the IRS assessed them even if you didn’t pay – you can complete and file IRS Form 843, entitled “Claim for Refund and Request for Abatement,” by July 10.
Because the court action is not yet final, you can make it clear that you are filing a “protective claim” to protect your rights while the legal situation is uncertain, Ms. Collins said. To do this, she suggested on her blog to simply write “Kwong Case Protection Refund Claim” or similar language at the top of the form.
The instructions for Form 843 are straightforward, Mr. O’Saben said, and some taxpayers may be able to fill it out themselves.
Ms. Marine advised taxpayers who were assessed penalties and interest of more than $5,000 in the 2019 to 2022 tax years or whose situations were otherwise complex should “really consider” consulting an accountant or tax attorney. Understanding the impact of the legal process is evolving, she said, and a professional can help keep your claim on track.
How should I submit the form?
The form cannot be submitted electronically, Ms. Collins said, but must be completed on paper and sent by mail. Make sure you use certified mail so you have a receipt proving the document was sent. She is pushing the IRS to provide an electronic filing option to avoid a flood of paper applications, but it’s unclear whether that will happen.
Ms. Collins warned taxpayers to be wary of possible scams related to pandemic-era refunds, such as offers of quick refunds or guaranteed eligibility. “Taxpayers,” she said, “should approach any unsolicited tax advice with caution.”