Millions of taxpayers have until the end of today to claim refunds on IRS penalties and interest they paid during the COVID-19 pandemic, according to the Taxpayer Advocate Service. The July 10, 2026 deadline marks the final day for eligible Americans to file a claim under a federal court ruling that found the government wrongly assessed penalties during the disaster period.
The opportunity stems from Kwong v. United States, a case decided by the U.S. Court of Federal Claims that ruled the COVID-19 disaster relief statute automatically extended federal tax deadlines from January 20, 2020 through July 10, 2023. The court determined the IRS had incorrectly charged penalties and interest during this extended period, according to multiple tax law sources.
Tens of millions of taxpayers may be entitled to refunds or abatements of penalties and interest assessed during the nearly 3.5-year COVID-19 federal disaster period, according to the Taxpayer Advocate Service. However, relief is not automatic. Most taxpayers must file a claim on or before July 10, 2026 to preserve their right to a refund or abatement.
To claim a refund, eligible taxpayers must file IRS Form 843, titled Claim for Refund and Request for Abatement. Individuals, businesses, estates, and trusts may all be eligible if they paid penalties or interest on payments due between January 20, 2020 and July 11, 2023, according to H&R Block and CNBC. The specific penalties covered include failure-to-file penalties, failure-to-pay penalties, and estimated tax penalties, as well as underpayment interest accrued during that window.
The potential refund amount varies widely depending on individual circumstances. Some taxpayers may qualify only for modest recoveries, while others—especially business owners or those with multiple years of penalties—may recover substantial sums, according to James Moore & Co. The IRS will not automatically issue refunds; taxpayers must take action by filing their claim before the deadline ends.
Taxpayers can file Form 843 online through their IRS Online Account, by mail, or through a tax professional. The Taxpayer Advocate Service urges anyone who believes they qualify to check their tax transcripts to identify any penalties or interest assessed during the COVID period and file their claim immediately to meet the deadline. Missing the July 10 deadline may result in losing eligibility for the refund or abatement permanently.
Sources
- Taxpayer Advocate Service (IRS.gov) — Official guidance on COVID-19 disaster relief refund claims and July 10, 2026 deadline
- CBS News — Reporting on millions of taxpayers eligible for refunds and the July 10 deadline
- CNBC — Details on Form 843 filing and eligibility criteria for COVID-era penalty refunds
- Time Magazine — Coverage of the July 10 deadline and Kwong court ruling basis
- H&R Block — Information on eligible taxpayers and types of penalties covered
- James Moore & Co. — Analysis of refund amounts and variation by taxpayer type
